Consumer Lending Reform

Woodstock Institute identifies the negative effects of high-cost consumer credit and works to end the worst practices among payday lenders, installment lenders, and other consumer lenders.

October 23, 2013
Testimony of Spencer Cowan before the Consumer Financial Protection Bureau field hearing on the impact of the Credit CARD Act. Cowan thanked the CFPB for enforcement actions against credit card issuers and urged them to assess the pricing of add-on products and restrict up-front fees. Cowan also...
October 14, 2013

Chicagoans had an opportunity last week to voice their concerns about different types of consumer credit to the director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray.

September 24, 2013

We have a unique opportunity to tell the Consumer Financial Protection Bureau (CFPB) our concerns at a hearing CFPB will hold in Chicago on October 2.

August 22, 2013

Is student debt keeping you up at night? You’re not alone: student debt loads now reach more than $1 trillion across the country and much of the debt isn’t being repaid

August 9, 2013
The men and women who serve our armed forces are uniquely vulnerable to debt traps caused by high-cost credit products.
August 2, 2013
This comment letter encourages the Department of Defense to expand the Military Lending Act (MLA) to ensure that service members and their families are protected from all forms of high-cost credit. Passed in 2007, the MLA instituted a 36 percent annual percentage rate (APR) cap for certain kinds of...
August 1, 2013
Joachim Pantelis soon won't be visiting his local PNC Bank branch in Clairton anymore. The only bank in this downtrodden town will close Aug. 16.
July 26, 2013

In the early 1970s, Aaron and Sylvia Scheinfeld were unhappy with the state of things in the Chicago region. Redlining, predatory lending, and inequality plagued the area.

July 2, 2013
It’s coming down to the wire to make sure that Richard Cordray is confirmed as the Director of the Consumer Financial Protection Bureau.
July 1, 2013
Sign on letter urging Sen. Mark Kirk to vote for Richard Cordray's nomination as head of the Consumer Financial Protection Bureau. Sen. Kirk previously voted against moving Cordray's nomination forward and has signed a letter indicating he will oppose the confirmation. A vote against...
June 27, 2013

The recent focus on payday loans by federal regulators is causing some payday lenders to modify their products from traditional short-term loans to longer installment loans in the hope that longer-term loans may fall outside the scope of anticipated regulations. 

June 7, 2013
Consumer advocates are calling for a ban on all types of payday lending, saying that without regulatory federal laws, millions of borrowers charged triple-digit annual percentage rates (APR) will continue to be trapped in never-ending cycles of debt.
June 3, 2013

Leading financial justice organizations from four key states today called on federal and state regulators to ban all types of payday lending. The organizations, from California, Illinois, New York, and North Carolina, released a report highlighting the need for strong state and federal laws and filed detailed comment letters with federal regulators urging strong action to end payday lending by banks.

The Case for Banning Payday Lending
June 3, 2013

For years, community groups and advocates around the country have waged pitched battles to eliminate payday lending in their respective states. Notwithstanding extensive documentation of the payday lending debt trap and the billions of dollars payday lenders have systematically stripped from low-income families and communities, especially those of color, the payday lending industry has cannily built and exerted its political power in state capitols throughout the U.S. As a result, many states permit usurious payday lending, with often dire consequences for millions of payday loan borrowers already struggling to make ends meet.

May 30, 2013

This comment letter supports proposed guidance from the OCC and FDIC regarding bank deposit advance products, which are functionally equivalent to payday loans. The letter also recommends that the OCC and FDIC institute an annual percentage rate cap, require APR disclosure, prevent mandatory automatic repayment, and strongly enforce the guidance.

Richard Cordray
May 23, 2013
Thank you to everyone who received our email earlier this week and made calls to Sen. Kirk’s office urging him to support Richard Cordray as the director of the Consumer Financial Protection Bureau. Senate Majority Leader Harry Reid (D-Nev.) recently decided to postpone the vote on Director Cordray’s confirmation until July.
May 20, 2013

Senate Majority Leader Harry Reid announced plans to hold a vote on Consumer Financial Protection Bureau (CFPB) director Richard Cordray’s confirmation. It’s no surprise that some Senators—including Illinois’ Mark Kirk—are threatening to filibuster the vote. The vote to overcome the filibuster will happen tomorrow. 

Dory Rand
May 16, 2013
 Last month fair lending advocates cheered when the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation proposed new guidance that would require banks under their supervision that offer bank payday or deposit advance products to comply with traditional...
May 14, 2013
Bank regulators released proposed rules on April 30 that, at long last, would enact strong consumer protections for “deposit advance products”—essentially, payday loans offered by a mainstream bank. To hear it from the banks, making sure that borrowers can pay back loans and...
April 29, 2013

The Consumer Financial Protection Bureau (CFPB) recently released information that makes it easier for the public to detect worrisome practices in financial services and assess whether financial institutions are adequately serving consumers.  

April 26, 2013

CHICAGO—Proposed new guidance released today by two of the federal banking regulators could put an end to the worst practices of payday lending by  banks. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) proposed standards that the banks they regulate would have to comply with regarding what they call “deposit advance” features on bank accounts and reloadable prepaid cards. 

April 24, 2013
A staggering amount of support is pouring in from around the country calling on federal regulators to end payday lending practices by banks and through bank support. News reports indicate that prudential regulators will release guidance on Thursday strongly limiting bank payday. Yesterday, our partners at the Sargent Shriver National Center on Poverty Law authored a blog post demonstrating the large role banks play in these short-term, high-cost loans. Reinvestment Partners went further, identifying exactly how much banks are giving to fringe lenders.
April 17, 2013
Major federal policy decisions are so often made without consideration of what reality is like outside of the Beltway. One of our key goals at Woodstock is to make sure that the voices of people working on the ground in Illinois are heard by decision-makers in Washington, D.C.
April 16, 2013
Last week Illinois Senator Dick Durbin introduced the Protecting Consumers from Unreasonable Credit Rates Act to protect consumers of short-term loans such as payday loans and car-title loans. The bill complements the SAFE Lending Act, sponsored by many of the same Senators, which would protect consumers’ bank accounts and level the playing field for all payday lenders.
April 11, 2013
Concern is growing among advocates, regulators, and the media about the increasingly enormous level of student loan debt in the United States. Outstanding student debt grew to over $1 trillion dollars in 2013, with private loans making up roughly $150 billion of that amount. Compared to federal student loans, private student loans are often more expensive, are more commonly marketed with questionable practices, and have fewer options for making payments more affordable if a borrower falls on hard times. There are at least 850,000 individual private student loans in default, totaling roughly $150 million.
April 2, 2013
Our friends at the Center for Responsible Lending (CRL) are gathering signatures for a letter to federal banking regulators urging them to stop banks from offering damaging payday-style loans. The letter, which will be sent to leaders of the Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency, outlines some of the most debilitating effects payday loans have on borrowers. No matter where they originate, these loans often carry interest rates (APRs) of up to 400 percent, trapping borrowers in a debt cycle that CRL says lasts an average of 175 days. 
March 19, 2013
The Senate Banking Committee voted earlier today 12-10 along party lines in favor of the confirmation of Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB). Cordray’s nomination now goes to a vote by the full Senate. Unfortunately for Illinoisans, Senator Mark Kirk voted against Cordray, who has earned widespread, bipartisan praise for his work leading the CFPB.
March 7, 2013
They’re at it again: 43 Republican Senators vowed to block the confirmation of Consumer Financial Protection Bureau director Richard Cordray unless the CFPB is stripped of its independence. We need your help to make sure that the CFPB has the authority and leadership it needs to make the financial marketplace safe for consumers.
January 23, 2012
By Tara Siegel Bernard January 20, 2012   Blacks are about twice as likely as whites to wind up in the more onerous and costly form of consumer bankruptcy as they try to dig out from their debts, a new study has found.   Henry E. Hildebrand III, who has served as a Chapter 13 trustee in Tennessee...
November 1, 2011
By Megan Cottrell November 1, 2011   Dolores Mederos likes numbers. A former accountant in Mexico, she keeps a detailed monthly budget for her household in a computer database. But one thing about the U.S. financial system puzzled her: credit.   “My entire life, I’ve bought things in cash,” she...