Three individuals and a maze of corporations have been indicted in New York for felonies involving payday lending. Conspiracy, and 38 specific counts of Usury are charged. This criminal network extended "loans" for which the per annum effective interest rate typically ranged from 350-650%. A 1290% annual interest rate was charged on one loan in the indictment.
Here's a copy of the indictment:
Here is a link to NYT's coverage:
8:39 AM PT: Per the indictment, the conspirators were repeatedly advised by state agencies and officials, beginning in 2003, that their activities were illegal, but continued to operate until 2013, when their bank (not identified in the indictment) ceased processing payments for the syndicate (no doubt under threat of legal action).
In 2012 alone, the conspirators had $500M in funds flow through their scheme.
In 2012 38% of the U.S. population was "unbanked or "underbanked," the average "underbanked" household spent $2500, or 10% of gross income, on interest and fees for "alternative financial services."
It's time to bring back postal banking:
9:50 AM PT: One mechanism being used at the federal level to disrupt these criminal activities is a DOJ program (aimed at reducing fraud facilitated by banks) known as Operation Choke Point:
Hat tip to Deep Texan for reminding me about this.