This article by NPA Director George Goehl originally appeared in the Huffington Post on December 10, 2009

On Friday, December 11, the House is likely to vote on a long-overdue financial reform package. Among other things, the bill would create a consumer protection agency, charged with making sure financial products that enter the market are safe for people and the economy. As we’ve seen over the last 10 years, this is a job that has remained unclaimed in Washington. The Federal Reserve, the Office of the Comptroller of the Currency, and other federal regulators all passed on chances to protect consumers, leading to the proliferation of predatory lending products that helped send our economy into a tailspin.

As Congress dithers and debates the merits of protecting people, everyday Americans have decided they need to protect themselves. In the last couple of weeks a number of community-based organizations have begun to form their own line of defense against predatory lenders and predatory products.

On Black Friday, the Rev. Charlotte Dotts and fifty people from the Central Illinois Organizing Project (CIOP), a faith-based organization, shut down the Bloomington office of payday lender Advance America. Dotts and her neighbors and parishioners are challenging Advance America to lower their rates to 10%. Advance America charges borrowers as much as 400% for a payday loan. The average $300 payday loan ends up costing the borrower $900! This is the exact type of predatory product that we need protection from. Little good can come from payday loans, which trap borrowers in a vicious cycle of debt, increase the likelihood of default on other loans, and strip wealth from local communities.

Where does Advance America get their financing? For starters, they received a $270 million line of credit from Bank of America. The same Bank of America that needed $45 billion from the Troubled Assets Relief Program. Yes, taxpayers helped save a bank that finances a payday lender who makes loans with interest rates of up to 400%. This Saturday members of CIOP will be holding a demonstration at 11:30 a.m. in Springfield, IL demanding that Bank of America discontinue financing of payday lending. To find out more about the gathering, please call the CIOP Regional office at (309)827-9627.

Speaking to a gathering of hundreds in Chicago, Senator Richard Durbin (D-IL) called payday lenders the “bottom feeders” of the financial industry. Earning the title of bottom feeders of an industry that is well stocked with bottom feeders, sums up just how evil payday lenders are.

Last Saturday, 60 members of Iowa Citizens for Community Improvement (CCI), shut down operations of the payday lending shop of Ace Cash Express in Des Moines. Ace Cash Express also charges rates of up to 400%. The action was led by Ferol Wegner and Brenda LaBlanc, two retired Iowans who are protecting their community from predatory financial products. Until Congress leads the way, they intend to do it themselves. Images from the gathering are available on Flickr and YouTube.

Iowa CCI members did not march to Ace Cash Express simply to express their anger. They had clear proposals, including challenging Ace to set an example for the rest of the industry by capping interest rates during the holiday season at 10%, and extending repayment periods from two weeks to two months.

Iowa CCI also called on the Iowa state legislature to pass interest rate caps and extended repayment periods during the 2010 legislative session. House File 288 and Senate File 463 both include provisions aimed at cracking down on payday lending.

As the House prepares for the first big vote toward creating a more transparent and accountable banking system, what remains unclear is this – considering what has taken place within our financial system over the last 10 years, how could anyone be against an agency that protects people and our economy? For members of the House it’s a clear choice – protect Main Street or please Wall Street. It really is that simple. As far as I can tell, there are no organizations that actively engage and represent Americans (who do not work in the financial industry) that are fighting against a consumer protection agency. The ones trying to kill the agency are the financial lobby and Wall Street. That should tell us all we need to know.

Hopefully, the House will take a critical step and choose to protect people and pass a strong consumer protection agency. Until then, courageous volunteers like Rev. Dotts, Brenda LaBlanc, and Ferol Wegner will carry the torch, protecting their communities until help is on the way. We’ll find out on Friday just how long they’ll be waiting.

Members of the Central Illinois Organizing Project bearing the message “Hold Banks Accountable”, shut down the offices of Advance America on Black Friday to demand an end to usury and foreclosures during the holidays.

These 52 members of the Central Illinois Organizing Project, fired up from the Showdown in Chicago and our recent actions on the Treasury and Goldman Sachs in Washington DC, marched to Advance America’s Bloomington office.  They delivered the demand that the predatory lender limit interest rates to 10% during the month of December.  Advance America is the biggest payday lender and is known to charge as much as 400% interest.  Research by National People’s Action shows that they and other payday lenders target low-income communities and minorities.  Advance America locked down the building to keep the protesters out, but CIOP was able to get their demand letter delivered by the police.

Advance America is financed by Bank of America.  B of A gives them a $270 Million line of credit, even while foreclosing on families and after receiving $47 Billion in bailout dollars from those families.  This is one of the most perverse examples of communities being forced to finance their own destruction.  As CIOP Director Don Carlson put it, “Taxpayers are funding big banks to fund payday lenders to charge us 400% interest.”  CIOP also demanded that Bank of America cease all foreclosures during the month of December.

The action was covered by local TV and radio, and was part of an ongoing series of actions across the country to hold banks accountable for breaking our economy.  Enough is enough – CIOP and NPA don’t intend to stop until we have a financial system that works for the people instead of against them.

Yesterday, Goldman Sachs announced it would donate $500 million to help small businesses recover from the recession and finally apologized to the American people:

“We have participated in things that were clearly wrong and have reason to regret…we apologize,” said Goldman’s CEO, Lloyd Blankfein, at the National Association of Corporate Directors event in New York.

The charitable initiative is a good step toward fixing the economy that Goldman Sachs helped to break, but it’s a drop in the bucket compared to what they could do to help families and workers stay in their homes and keep their jobs, especially over the holidays.

In the past month, we have made three attempts to deliver a letter to Goldman Sachs CEO Lloyd Blankfein asking that he donate their 2009 bonuses and compensation pool, which exceeds more than $500 million, to stop the tidal wave of job losses and foreclosures that they helped spur. These attempts occurred on October 25 in Manhattan by National People’s Action affiliate Northwest Bronx Community & Clergy Coalition at the home of Lloyd Blankfein; on October 26, during the second day of the Showdown in Chicago with a 1,000 person demonstration outside Goldman Sachs’ Chicago headquarters; and on November 16 where more than 200 people led a spirited demonstration outside Goldman Sachs’ DC headquarters. Goldman Sachs officials accepted our demand letters in Chicago and in Washington D.C.

Nov 16, DC - Rev. Pierce of National People's Action calls out Goldman Sachs and its CEO, Lloyd Blankfein, for not doing enough for communities who bailed out the Wall Street firm.

Goldman Sachs owns loan-servicing companies, like Litton LLC, who have offered loan modifications to only 12% of their eligible borrowers. They also invest in companies like the Stella D’Oro cookie factory in the Bronx, that recently laid off 150 employees and decided to move the company to a non-union facility in Ohio to cut costs.

If Goldman Sachs is serious about helping small businesses and everyday Americans, they will tell their loan servicing companies to do what it takes to keep families in their homes, and give workers like those at the Stella D’Oro cookie factory their jobs back.