A year has now passed since the revised Money Lending Business Law (MLBL) came into force. The law, which aimed to prevent people from being snowed under by multiple debts, is particularly hard on hard-up housewives who take out loans unbeknownst to their spouses.
Nikkan Gendai (July 5) introduces one such woman, the pseudonymous Kazuko, who regularly took out loans of around 40,000 to 50,000 yen a month to supplement the income of her husband, who operates a bicycle shop.
She eventually found herself owing over 2 million yen. Then she spotted an ad on the Internet for a service that promised that it could help people reduce both accrued interest and principal by a single "debt consolidation" loan.
Using the pretext that she wanted to visit a former school classmate who been hospitalized in Kyushu, Kazuko instead made her way to Tokyo. But the man there informed her that due to the terms of the new law, he couldn't extend a loan. She was already in hock to several companies for over 2 million yen -- more than one-third of her husband's annual income.
Instead, the company referred her to an attorney. "You want to streamline your debts?" the attorney asked. He set to work, and not only arranged so that she only had to return the principal, but also that she could get a partial refund from the moneylenders on grounds they'd charged her excessive interest. The lawyer billed her 210,000 yen for services, plus a success fee.
But the legal action placed Kazuko's name on a nationwide blacklist, where it will remain for the next five to seven years. Which means any further credit is out of the question.
"I was tricked by a crooked operator," she says. "The attorney was part of the scam. They ripped me off and split the proceeds. While the amount of money I had to pay back got reduced, now I'm stuck with the lawyer fees. Nothing has improved my situation."
Kazuko was left with no choice but to come clean with her husband. While they did not divorce, their marriage was badly strained.
As evidence the new law is having an impact, a survey of small-lot borrowers conducted in April by the Finance Ministry found the number of respondents who had been unable to obtain loans rose to 25.7%, up from 16.8% in March of 2010.
Hiromi Arita, director of the Group for Women's Independence, tells Nikkan Gendai "Since the spigot from which housewives obtained needed funds was abruptly turned off, we are hearing about more cases of them being driven to desperation after they were swindled by crooked operators, or forced into borrowing from illegal loan sharks. Nearly all of the ones who were using cards to borrow from ATMs had concealed their activities from their husbands. Now these women are forced to deal with the problems on their own, and struggling over what to do."
Nami, age 48, who operates a small restaurant with her husband, was thinking about approaching a bank to obtain needed funds.
"Back in the days when we both worked at salaried jobs, when I needed money I could borrow with the ATM card," she says. "Now I don't know if I should use the bank or dig into my savings."
Unbeknownst to her husband, Nami owes about 1.5 million yen.
Some banks now do extend collateralized loans of up to 300,000 yen to housewives after a relatively simple credit check. But while that may not seem like a huge amount, it can mount up quickly, and before you know it, you're deep in the hole.© Japan Today