The percentage of assets deposited in banks and thrifts, which have community reinvestment obligations under CRA, has declined dramatically. When the CRA was enacted in 1977, households held 25 percent of their financial assets at CRA-regulated institutions. By 2007, that share had declined to 15 percent.
In addition to enacting consumer protections for the payday loan industry, increasing the number of lenders competing to provide affordable short-term loans is critical to driving down the cost of credit, said Williams.
As part of this strategy, Woodstock Institute conducted an 18-month evaluation of the short-term loan products offered by six credit unions participating in a joint program offered by the National Federation of Community Development Credit Unions and JP Morgan Chase.