The Liberal Democratic Party is looking to punish unregistered moneylenders and those who engage in other illegal business practices with prison terms of up to five years and fines of up to 5 million yen, LDP lawmakers said Wednesday.
Offenses of this kind currently carry prison terms of up to three years and fines of up to 3 million yen.
Yasuhisa Shiozaki, head of the LDP's financial and monetary division, briefed Prime Minister Junichiro Koizumi on these plans, which also include increasing the registration fees paid by moneylenders.
A fee increase would discourage loan sharks from registering with the central or prefectural governments in an effort to establish public credibility, the lawmakers said.
The LDP plans to submit to the current Diet session bills that would amend related laws, they said.
"It is a good thing," Koizumi told reporters. "There are many people experiencing serious harm due to high interest and harsh collection methods."
It is important for people to be cautious and eschew involvement with loan sharks while the government implements its crackdown, he said.
The LDP also plans to order moneylenders to submit business guarantee deposits when opening sales offices.
According to the LDP plan, moneylenders' guarantee requirements would be reduced when they join moneylenders' associations, while the self-policing mechanisms of the associations would be strengthened, the lawmakers said.
The LDP may also seek to nullify contracts that involve more than the maximum annual 29.2 percent interest rate set under the investment law, they said.