LOAN sharking and profiteering are now a criminal offence, punishable with up to 14 months in prison, according to a new law passed yesterday.
Even though the legislation was passed unanimously, it became the subject of a heated debate between the parties, inevitably leading to a showdown over the economy.
With the new law – which doesn’t include banks and co-ops – people will be allowed to take out loans from persons other than banks, but it will only be considered legal if the interest charged is less than 10 units higher than the average interest charged by banks in the preceding year.
With the current economic climate, there had been an increased number of reported cases from members of the public who fell victim to blackmail and exploitation after accepting loans with extortionately high returns.
The new legislation provides a prison sentence of up to a year for someone convicted of threatening another person to their settle debts, while blackmailing will be punishable with up to 14 months jail.
The Chairman of the House Legal Affairs Committee, DISY’s Ionas Nicolaou said his committee had paid special emphasis to the bill after hearing of an upsurge in cases involving Cypriots in serious trouble after falling victim to loan sharks and profiteering.
But he added: “If the prosecuting authorities don’t show the necessary determination, you understand that this problem will not be resolved”.
However, it was a passing comment by AKEL’s Aristophanis Georgiou, who wondered whether the constantly rising bank rates could be considered loan sharking, which really got the tempers flaring.
DIKO’s Nicolas Papadopoulos reacted, wondering: “If the banks’ 6.0 per cent interest rates are considered loan sharking, was it also considered loan sharking when parliament imposed a 9.0 per cent interest rate, before the liberalisation of the interest rates?”
He went on to launch an attack on the government over the economy, blaming it for failing to reduce its operative costs and leading to the economy constantly being downgraded.
Papadopoulos went a step further and said it was the government’s financial policy that led to the perpetual rises in interest rates.
This proved too much for the parliamentary spokesman of leading party AKEL, Nicos Katsourides, who retaliated: “Some could be discussing the situation in Fukushima and blame the government’s policies for it.”
