NY AG Brings Loan Sharking Case Against Lucchese Organized Crime Family for Charging 200% Interest While CFPB Dismisses Case Against Payday Lender Charging More Than Four Times as Much

by Jeff Sovern

Apparently the Lucchese Organized Crime Family charges less than a quarter of what payday lenders charge. Last week, New York State Attorney General Eric T. Schneiderman announced indictments of ten members of the group in the largest loansharking investigation in the office's history. Schneiderman's press release reports:

[U]surious interest payouts exceed[ed] a million dollars just during the approximately one-year investigation.

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Victims were allegedly charged exorbitant weekly loan rates averaging over 200 percent per year, effectively creating a high-cost debt trap for all individuals taking out such loans.

Now compare that to the CFPB's description of the payday lending case it recently voluntarily moved to dismiss under Mr. Mulvaney's leadership

* * * Golden Valley Lending and Silver Cloud Financial have offered online loans of between $300 and $1,200 with annual interest rates ranging from 440 percent up to 950 percent.  * * *

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The lenders’ websites did not disclose the annual percentage rates that apply to the loans. When contacted by prospective borrowers, the lenders’ representatives also did not tell consumers the annual percentage rate that would apply to the loans.

Which sounds worse? I've obviously left out a lot of the press releases out in the interest of brevity, but go read the full text of both and see which sounds worse to you.

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