Evening star., 1935-09-15
LOAN SHARK DRIVE
TO CURB 'GOUC|NC'
OPENS TOMORROW
Legal Limit of | Per Cent
Per Month Will Be En-
forced in D. c.
IS COMPANIES HELD
TO BE UNLICENSED
Victims of Excessive Rates Are
Asked to Report to Pretty
man.

The combined forces of the Police.
Law and Insurance Departments of
the District will be turned loose to-
morrow by the Commissioners against
loan sharks in a drive to compel
licensing of all lenders and observance
OF the legal limit Of per cent per
month on small loans.
According to the best available re-
ports there recently were rs small-loan
companies here operating without
license. Since announcement was
made Of plans for the drive begin
ming tomorrow. four companies have
applied for license.
Corporation Counsel Prettyman is
sued an invitation to all loan shark
victims" to bring their complaints to
his Office.
Undercover operatives have been
assigned to collect evidence against
the II others, unless they apply for
license under the 1913 law, or if they
are found to be charging more than
the per cent per month limiR
Curran Heads Drive.
The drive has been placed under
the direct charge of Edward w. Cur
ran. assistant corporation counsel. The
Bureau of Internal Revenue. he said,
will be requested to examine the in
come tax returns of lawyers who have
been retained by some of the COM
panieS known to be operating here.
The purpose Of this, he explained.
would be to gauge the amount of extra
fees charged in cases where additional
legal fees have been added because
borrowers we're unable to meet their
original obligations and we're forced
TO pay extra for extensions.
He said: 1T is my intention to ask
the bureau to give attention to cases
IN which attorneys have been receiv-
ing fees for legal services"
John A. Marshall, superintendent of
insurance, has been requested by Cur
ran to investigate one insurance COM
pany alleged to have been working in
cooperation with small loan COM
pany.
Use Under Cover Men.
At the request Of Prettyman. Police
Superintendent Ernest w. Brown has
assigned under-c cover men to assist
Curran in investigations. Also, all DO
lice captains recently were directed to
have a complete survey made Of all
small loan companies. Curran re.
ported a map has been prepared show
ing exact location of each company
known to have been operating. All
are to be watched, he said.
II excessive charges are levied, or
II firms continue to operate without
license and charge more than the gen.
eral legal interest limit of s per cent
per year, all concerned will be served
with warrants, Curran declared. He
said this would include the lenders,
their agents, their 'procurers," their
attorneys and insurance companies.
The drive was planned by Pretty
man after Congress failed to pass a
new measure to permit charges total
ing per cent per month as against
the present l per cent limit. Prose-
cutlon had been withheld in the belief
the new law would meeL congressional
favor. The companies had claimed
tACy IOulu IlOL survive uQQeE ! per
cent per month limit.
"Gougings" Reported.
Numerous cases of "gouging" have
been disclosed since plans were
announced. Curran yesterday told
this story:
The borrower signed a note for
$3.50. He received S340. He con-
tracted to pay s429S3 by the end of
year. The loan was secured by his
automobile, as a chaItel mortgage.
The lender took out an insurance
policy for $3.50 for one year and the
borrower was required to pay a pre-
MUM of S6743.
Then it developed there was a
prior judgment against the borrower
and that claimant seized the car.
The small loan dealer made a settle
ment with the other claimant and
charged the borrower S25 for legal
services, although the lender knew of
the lien against the collateral at the
time the loan was made.
When the lender was threatened
with prosecution he settled with the
borrower on a basis satisfactory to
the latter"