loan shark is the individual who lend money to someone else illegally, with rates of high interest rates and without the authorization of the Central Bank.
Loan sharking, also known as usury or charging a premium, is an illegal practice and is considered a crime against the popular economy in Brazil, according to the article 4 of law no. 1.521 of December 26, 1951.
"Art. 4º. The pecuniary or actual usury is a crime of the same nature, considering:
a) charge interest, commissions or percentage discounts on debts in cash in excess of the rate allowed by law; charge premium above the official exchange rate, on the amount exchanged for foreign currency; or, still, lend under pledge that is exclusive to an official credit institution;
b) obtain, or stipulate, in any contract, abusing the pressing need, inexperience or levity of another part, equity income that exceeds the fifth of the current or fair value of the provision made or promised".
The penalty foreseen for the active subject of the loan shark can be from six months to two years of detention, plus the payment of fines.
The main targets of loan sharks are people defaulters before the National Credit Protection Service, that is, that they are not able to obtain a loan or credit through the legal channels, because they do not have sufficient income or debts in arrears.
In English, the correct term for moneylender is loan shark, which in the literal translation means “loan shark”.
Learn more about the meaning of usury.