First, the weekly rate by a loanshark is going to depend no any number of things. Who he's lending to, for what, how much, how long, etc. It might be 2% a week. It might be 5% a week. The lower the amount loaned, the higher the vig.
Second, the loanshark doesn't just lend to anyone. They have to know them. It's often a different clientele that is going to a loanshark and one that is going to the local payday loan outlet. Often it's people who are already involved through gambling.
Third, as for "larger amounts," the mob doesn't make millions from the racket by only lending nickels and dimes.
Indeed.
My only point is that there are many more avenues of credit available than there used to be, even for people with marginal credit, bad jobs, no jobs or poor business plans. This has to have impacted the market for traditional OC loansharking, as even though their interest rates are if anything lower, there is a stigma and fear involved in dealing with a mob backed shark, that isn't there for other alternatives.
I'm not arguing that the mob still isn't making millions from loansharking. But I don't think it's quite as much as it used to be. It's a hypothesis. I'm not aware of any rigorous comparative studies.
According to this article the payday loan business is by itself a $42 billion concern.
Payday Lenders That swamps any loan shark portfolio by any current mob family that I know of. I imagine it would be at least comparable to, if not larger than mob loansharking in total. But like I said, I don't know of any studies. The industry is able to spend millions to ensure that state/federal laws remain to its liking.
And of course that doesn't include other "shady" creditors such as credit cards, hard money lenders, rent-to-own places, subprime mortgage orginators, etc.
When Lawrence Dentico was indicted he was accused of having a "mere" $1.6 million in loansharking proceeds over a 6 year period. And he was at the top. I don't doubt that loansharking remains profitable for certain families or groups. I just don't know that it's quite as lucrative as it used to be. For someone who needs $30K to set up a drug deal, bring in Eastern European prostitutes or pay off his local councilman to get a shady land deal approved, the local loan shark will remain the go-to guy. For others???
