Mom-And-Pop Loan Sharks Being Driven Out By Big Credit-Card Companies

Top Headlines

Finance

Tips For Cheaper Airfare

Whether the busy travel season, fuel prices, or airline collusion is to blame, airfare is currently very pricey, making traveling more difficult. The Onion walks you through some ways to reduce the cost of flying

Budget Wedding Tips

With Americans still feeling the effects of the recession, many engaged couples are looking for ways to save money on their wedding by holding a smaller ceremony, hunting for deals, and more.

Commonly Overlooked Tax Credits

As Americans rush to fill out their tax forms before the April 15 deadline, many may not realize that they are eligible for multiple tax credits that would earn money back from the government.

Man Completes Life $130,000 Over Budget

SAN FRANCISCO—Having drastically underestimated the expenses required for such an elaborate production, recently deceased local man Norman Dennison is said to have completed his 84-year life Tuesday approximately $130,000 over budget.

Newlywed Couple Looks So Deeply In Debt

CHICAGO—Saying that you could tell by the way they stared into each other’s eyes, friends and family of newlywed couple Patrick and Heather Vaughn told reporters Friday that the bride and groom look so deeply in debt.

How Powerball Works

With no winner from the previous drawing, the jackpot for Wednesday’s Powerball lottery is expected to surpass $450 million, as gamblers around the nation buy more tickets in hopes of drawing the lucky numbers.

The Pros And Cons Of Free Community College

As part of an effort to make higher education accessible to all Americans, President Obama has proposed offering two free years of community college to qualified students, a plan critics say is too expensive and misses the mark on education reform.

Allowance To Teach Child Importance Of Parental Dependence

MUNCIE, IN—Saying that they wanted to instill lifelong financial habits in their young son, the parents of 9-year-old Jeremy Lambert explained to reporters Monday that they give him a weekly $10 allowance to teach him the importance of parental depe...

Online Shopping vs. In-Store Shopping

While brick-and-mortar stores like Walmart and Target are advertising door-buster deals to get consumers in their aisles on Black Friday, many Americans are opting to take advantage of the ease and product variety of online shopping.

Scientists Receive $10 Million Grant To Melt Stuff

COLLEGE PARK, MD—Saying the money would help further researchers’ understanding of the awesome scientific phenomenon, representatives for the American Institute of Physics announced Tuesday that they had received a $10 million grant to melt st...

The Cost Of Raising A Child

According to a new report by the USDA, the cost of raising a child until age 18 now exceeds $245,000, after which many parents will also have to foot the bill for college.

How Public Schools Spend Taxpayer Money

Public school districts in the United States receive billions of taxpayer dollars in state and federal funding every year to pay for teacher salaries, school bus transportation, building maintenance, counseling services, and more.

Bank Of America Introduces New $50 Underdraft Fee

CHARLOTTE, NC—Saying the penalty will cover the costs incurred by the financial institution whenever a customer makes a withdrawal that results in a positive account balance, Bank of America introduced a new $50 underdraft fee Tuesday on all checkin...

How To Protect Your Personal Information Online

Following the recent data breach at retail giant Target, which exposed credit card numbers and personal information of as many as 110 million people, many Americans have grown concerned about their safety and privacy online.

Report: Gap Wider Than Ever Between Ultra-Rich And Reality

PHILADELPHIA—A report released Wednesday by economists at the University of Pennsylvania confirmed that the already massive gap between the world’s ultra-rich and reality is now at historic levels and only continues growing wider each year.

'That Seems About Right,' Says Soon-To-Be-Audited Man

CAMDEN, MN—While filling out a 1040 form and other documents Tuesday in preparation for filing his 2012 federal tax returns, local man Robert Moran, a blog writer who will shortly be audited by the Internal Revenue Service, announced that his calcul...

New Visa Talking Credit Card Urges Buyers To Go For It

SAN FRANCISCO—Financial services giant Visa held a press event Tuesday to introduce "Visa Voice," a new line of talking credit cards that urges shoppers to just go ahead and buy it if that's what they really want. "Whenever ...

Nicolas Cage Broke

Owing $6.3 million in back taxes and facing financial ruin, Nicolas Cage, star of such hit films as Ghost Rider,...

Wachovia's Record Losses

Last week, Wachovia posted a quarterly loss of $23.9 billion, the largest ever for a bank. Where did it lose the money?

Swaggering Down 87%

NEW YORK—A wide-legged gait accompanied by an overconfident smile and a jauntily raised eyebrow may soon be a thing of the past due to recent economic turmoil.

Protecting Our Banks

The Federal Deposit Insurance Corporation, the body that insures bank deposits up to $100,000, has raised the number of "troubled banks" to...
End Of Section
  • More News
Up Next
TV Listings
Just Like Everything Else!: Fox 8 p.m. EDT/7 p.m. ABC Pete's wife is still on him about building that darn shed, these kids are going to be the death of Sheila and Dave, and the hot next-door neighbor is up in EVERYBODY'S business! Sunday nights on ABC couldn't be any more familiar!

Special Coverage

Food

Dating

Mom-And-Pop Loan Sharks Being Driven Out By Big Credit-Card Companies

PHILADELPHIA–Frankie "The Gorilla" Pistone leans wistfully on his bat. Then, without warning, he picks it up, swinging it furiously toward his deadbeat client's leg. Just before the Louisville Slugger makes contact with the man's kneecap, he pulls back, as only a real pro can, leaving the $250-in-the-hole man gasping in fear and relief. "Just get it to me by tomorrow, because next time, I ain't gonna let up," Pistone says.

Loan shark Frankie Pistone, whose way of life is endangered by the likes of American Express.

As the thankful man scurries off, Pistone pulls the cigarette out of his mouth and drops it to the ground. "I'm going to miss this," he says.

Frank Pistone is part of the dying breed known as the American Loan Shark. Not so long ago, the loan shark flourished, offering short-term, high-interest loans to desperate people with nowhere else to turn. Today, however, Pistone and countless others like him are being squeezed out by the major credit-card companies, which can offer money to the down-and-out at lower rates of interest and without the threat of bodily harm.

"It's a damn shame," said Joseph Stasi, 61, a South Philadelphia loan shark whose business is down 90 percent from its mid-'70s heyday. "These days, there's just no place for the small businessman. My kind, we just can't compete with the Visas and MasterCards of the world."

"The old customers don't come 'round here no more," said Felix Costa, 59, speaking from the Elizabeth, NJ, pool hall that has served as his place of business since 1972. "Time was, a guy who needed a quick $400 for a new refrigerator or some car repairs would come straight to me. Now, he just puts it on his Discover card."

Though their client lists are dwindling, the loan sharks still have their champions.

"Call me old-fashioned, but I prefer the loan sharks to the credit-card companies," said Gene Hobson of Detroit. "When I borrow money from Three Knuckles Benny, I know there's going to be a personal touch, whether it's a dead animal on my doorstep or one of my kids coming home with a missing toe. The credit cards just don't give you that sort of individualized attention. And, if you're late with them, it's a form letter and maybe–maybe–an irate call from the accounts-receivable department."

"With our overhead, we need to charge a 50 percent weekly interest rate just to break even," said a Chicago loan shark who identified himself only as "Johnny Toothpick." "We've got rent, pay-offs, and switchblade maintenance, not to mention travel expenses. How can we compete with rates as low as 18 to 26 percent a year?"

Continued Toothpick: "These [credit-card companies] are monsters. They care nothing about the damage they're doing to the American landscape by driving us out. Loan sharking was about more than giving people money and roughing them up when they didn't come through. It was about ruffling a kid's hair on the street, helping out a local fella who needed a break, and occasionally letting somebody off easy with just a couple of punches to the gut instead of a glass-filled sock to the face. It's a unique part of our shared national experience that, once extinct, will never come back."

With nearly 200,000 new credit-card solicitations going out every week, the loan sharks have little hope of regaining the ground they've lost.

"We were going by word of mouth, and we did pretty good around the neighborhood," Pistone said. "But these credit cards? With direct mail and the Internet, they reach a customer base we can only dream about. In this business climate, how can a small, independent goon possibly compete?"

Finance Video