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Troubled OCS bails out of consumer credit business

Date Posted: 2008-07-17

Okinawa’s largest consumer credit company has turned to the courts for protection against 2,300 creditors wanting repayment of ¥48.6 billion in debts.

The Naha District Court says OCS is now protected, and that creditors cannot touch the property and assets. OCS’s president, Hisashi Shinzato, has told the news media he didn’t want to take the action, but explained he tried to strike a deal with creditors, but was rebuffed. “The creditors didn’t agree to clear us, so we just need to go out of business.”

Shinzato says the loan business is ended, but other company functions—including credit card and gift coupon operations—are continuing.

OCS, a consumer credit company, began getting into trouble after a new Japanese consumer protection law instituted in 2006 reduced the amount of interest it could charge customers. This cut gross profits, and OCS in some cases had to refund interest already paid. Banks, Shinzato says, haven’t cooperated in helping the company.

The OCS closing means its ATM and cash cards are no longer operational, and loans are no longer being made.

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