Top Japan Official Vows Crackdown on Mob Loans Japan's finance minister pledged to crack down on lenders that fail to sever links with organized crime as lawmakers grilled him Wednesday over mob loans by banks and other financial institutions. Revelations that credit companies, banks and insurers failed to comply with laws against doing business with gangs and their associates has been an embarrassment for Japan, which has helped lead international efforts to prevent terrorism financing and other illicit transactions. Financial dealings by yakuza, as Japanese gangs are known here, have drawn renewed scrutiny after Mizuho Financial Group, the country's second biggest bank, admitted it failed to act after uncovering mob loans by a consumer credit affiliate. Finance Minister Taro Aso was among government officials and finance executives summoned to explain why the banking industry has not done more to prevent such transactions. "Much remains to be done to resolve this problem," Aso told a parliamentary hearing. We must follow up on this thoroughly or it will just re-emerge later. The Financial Services Agency, which falls under Aso's ministry, is investigating Mizuho Financial Group and other lenders following disclosures that gang affiliates were eluding checks meant to freeze them out of the financial system. Mizuho's president Yasuhiro Sato and industry, government and police officials acknowledged they were struggling to comply with longstanding laws against doing business with organized crime. Kazuhiro Omori, head of the Japan Consumer Credit Association, said his group was revising its rules and members are preparing to close any accounts violating them. It is very difficult. There are many cases to be reviewed," he said. Lawmakers chided Mizuho for delegating "know your customer" responsibilities to the bank's consumer credit affiliate, Orient Corp., which was responsible for most of the 200 million yen ($2 million) of loans extended by Mizuho to yakuza fronts. But Sato told the hearing that Mizuho itself had also issued problem loans. "It's not enough just to make rules if you don't actually carry them out," said Yuzuru Takeuchi, a lawmaker with the New Komeito Party, the coalition partner of the ruling Liberal Democrats. Japanese securities companies have long had access to police data on gang members and gang affiliates, but sharing of that information with banks has lagged, police and other officials said. Banks now are scaling back on lending through "tie-up" loans via the consumer credit companies that lack access to databases identifying customers with potential yakuza links. They are also stepping up information gathering for their own databases. The financial newspaper Nihon Keizai Shimbun reported that Mizuho had collected data on up to a million potentially suspect transactions, while the other major banks had also identified tens of thousands of such cases. Aso urged the banks to share such information with their credit affiliates. "It's clear that the problem arose because the banks were leaving such checks up to the consumer credit companies," he said. The scandal over mob loans has highlighted widespread problems with corporate governance in Japan due in part to the common practice of having industry officials move into regulatory jobs.