10/19/2008

$lumping The Shark: Wall St. Woes Hit Back-Alley Lender

Benny the Loan Shark has something in common with banks - he's made loans to subprime borrowers in danger of defaulting. But he's not likely to get taxpayer money to buy his nonperforming assets, so the low-level street lender is thinking of a radical change in the way he does business.Tanda, a 40-year-old mid-level loan shark who operates in upper Manhattan, said he lowered his interest rates by 50 percent during the spike in gas prices to drum up more customers. They're mostly small-store owners, cabdrivers and occasionally, drug dealers."They had hard times before, now they can't get anything from a bank. So I am it for them. Some people see an opportunity and kill them [charge more interest], so I decided to charge less. It gives me good word of mouth, and I get repeat business." Tanda says he charges about $200 a week on a $500 loan and $400 a week on a $1,000 loan. His limit is $5,000."Wall Street should take a lesson from me, I never lend what I can't afford to lose — and I lose very little," he said.

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