Criminal Charges against Iwaki Shinkumi: Clarify Alleged Involvement of Antisocial Forces

Editorial

16:15 JST, February 2, 2026

Iwaki Shinkumi not only allowed a huge volume of improper loans, but also strove to conceal its misconduct from investigative authorities. It must be said that its credibility as a financial institution has hit rock bottom.

The Tohoku Local Finance Bureau has filed a criminal complaint with the Fukushima prefectural police against Iwaki Shinkumi, a credit cooperative based in Iwaki, Fukushima Prefecture, as well as against individuals such as former executives for allegedly providing false explanations during an on-site inspection concerning irregular lending.

It is extremely unusual for a financial institution to be criminally charged. Rampant improper lending is something that should never occur at a financial institution.

Iwaki Shinkumi repeatedly extended fraudulent loans totaling ¥27.9 billion to major clients, whose financial condition had deteriorated, for about 20 years starting in 2004. To conduct such lending, it even opened fake accounts using the names of account holders without their consent.

More egregious still, it allegedly provided a total of ¥1 billion in funds to antisocial forces for a lengthy period, from 2004 to 2016.

Amid these circumstances, Iwaki Shinkumi’s performance deteriorated due to the impact of the Great East Japan Earthquake, so the government injected ¥17.5 billion in public funds into the credit cooperative in 2012.

A former chairman of Iwaki Shinkumi allegedly handed funds to an intermediary to stop street campaigning against the chairman by a right-wing group. It is astonishing that the improper lending was also reportedly conducted in part to raise that money.

Iwaki Shinkumi provides loans mainly to small and midsize companies as well as sole proprietors. As a community-based financial institution, it should be a trusted entity. Isn’t preventing ties with antisocial forces a fundamental prerequisite for financial institutions?

Underlying Iwaki Shinkumi’s problems is the failure of corporate governance that developed under the former chairman, who helmed the cooperative for 20 years until his resignation in November 2024.

The finance bureau launched an investigation in May last year. The lender’s closed organizational culture ran deep. An employee falsely claimed that they had destroyed a computer containing loan data, and they also concealed involvement of then executives in irregular loans. The lack of ethics permeating the organization is profound.

The finance bureau took a serious view of the heinous nature of such misconduct, including false statements, and decided to file criminal charges against Iwaki Shinkumi on suspicion of violating the law on financial businesses by credit cooperatives.

The prefectural police should thoroughly investigate the direct charge of false statements but also clarify the full picture of the case, including the lender’s improper loans and its relationship with antisocial forces.

The Financial Services Agency must also seriously reflect on itself, as the watchdog failed to detect the misconduct even though public funds were provided to the lender. It must urgently expand and improve its personnel structure, as well as strengthen measures for management oversight.

 (From The Yomiuri Shimbun, Feb. 2, 2026)