If you live in Illinois, call your State Senator and tell them to support the Consumer Installment Loan Reform Act (SB655 Amendment #1) today.

Senate Banking Committee Chairman Chris Dodd (D-CT) released the Restoring American Financial Stability Act of 2009 today. Woodstock Institute believes the bill contains important provisions that will protect consumers and prevent the risky lending and abusive practices that led to the financial crisis. Sen. Dodd’s proposal will create a Consumer Financial Protection Bureau to crack down on the most egregious abuses from big banks and allow states to act as first responders to stop problems before they escalate.

Financial reform is at a critical juncture in Washington. The House has already passed a bill to create a strong and independent Consumer Financial Protection Agency (CFPA) to put consumers’ interests over those of Wall Street and crack down on the risky lending that spurred the financial crisis. However, Senate Banking Committee Chairman Chris Dodd (D-CT) continues to compromise the agency’s independence in the interest of bipartisan support.

Would you take a loan with interest rates of 100 percent or more? Unlikely. Then why did 8.7 million American taxpayers do that in 2006?  The answer is that they were promised fast cash, but in many cases, were unaware that they were taking out a loan at all. US taxpayers in 2006 spent over $900 million to get their tax refunds a few days early.

By now, we know that refund anticipation loans (RALs) are expensive, risky, and target low-wealth taxpayers and communities of color.

So what can you do about it?

So many of us—families and businesses—are struggling to pay our bills during these difficult times.

While talks over financial reform legislation continue in the Senate, the financial industry is stepping up their attacks against attempts to create a more just financial system that would encourage investment in communities, allow small businesses to grow and flourish, and put consumers' interests as a top priority.

The low percentage of trial modifications that have become permanent illustrate that the Home Affordable Modification Program, or HAMP, may not be making a long-term dent in foreclosure activity. The Department of the Treasury released its seventh report card on how mortgage lenders are doing modifying loans for eligible homeowners under the government’s Making Home Affordable program (see the first, second, third, fourth, fifth and sixth report cards).

The Office of the Comptroller of the Currency (OCC) released a Policy Statement on Tax-Related Products and a Consumer Advisory on February 18, one month into the current tax season. The OCC is the U.S. Treasury Department agency that regulates national banks. Several national banks offer tax refund anticipation loans or RALs through partnerships with tax preparation services.

After Darren Robinson lost his job at a factory, he and his girlfriend Julie Fitzpatrick accrued almost $10,000 in credit card debt paying for living expenses and medical bills. Fitzpatrick found a company online that promised to make them debt free. The couple told the Chicago Tribune that they paid almost $1,500 in fees to the debt settlement company. After a few months, only $2,000 of the debt was settled, and their debts ballooned to $12,000 as collection calls and fees increased.