Woodstock InstituteChicago, Illinois
Published March 29, 2007
Increasing and protecting financial assets of low-income people and communities
It’s an organization of small size—six full-time staffers—but large accomplishments. The Woodstock Institute produces research and analysis to help improve the access, availability and pricing of financial products—such as checking accounts, home mortgages, and small business loans—for people of low and moderate incomes.
Begun in 1973 to counter “redlining” practice in low-income and minority communities, Woodstock set out to explore public and private policy alternatives that would end discriminatory housing and investment patterns in the Chicago metropolitan area. Soon it became clear that the organization’s work had national applications.
Low-income communities in America face substantial barriers to increasing and saving their financial assets. In fact, current estimates suggest that they are stripped of approximately $25 billion in wealth each year through predatory mortgages, payday loans and other lending abuses. Experts say that the financial issues addressed by Woodstock are more urgent and widespread than at any time in their three decades of existence.
Based in Chicago, Woodstock has helped preserve the strong, federal Community Reinvestment Act – the source of more than $4 trillion in loans and investments for low- and moderate-income communities – even as regulators and financial institutions have attempted to weaken it. Woodstock has promoted strict guidelines to curb predatory lending by national banks. It has increased consumer protections against payday lending abuses. It has worked to expand lower-income membership in credit unions.
The Woodstock Institute’s effectiveness comes from its neighborhood commitment, specialized expertise, and broad perspective. It mounts advocacy efforts in policymaking at the local, regional, national and international levels, while keeping its mission grounded in the interests of the low-income communities.
The group’s roots in rural Woodstock, Illinois, belie its modus operandi: effective, pull-no-punches advocacy and outspoken monitoring of local and global financial institutions. One example is the Institute’s fight to counter abuses in payday lending: small-dollar, short-term, unsecured lending to borrowers who typically experience cash flow difficulties. Woodstock played a critical role in the adoption of the Illinois Payday Loan Reform Act, which regulates the payday loan industry in Illinois and strengthens consumer protections. The law is one of the strongest payday loan reforms in the nation.
With financial markets evolving continuously, a key part of Woodstock’s work is to detect and document changing opportunities for – and challenges to – financial stability and asset building for both households and communities. As financial institutions become global organizations, Woodstock’s future work will include expanding its international collaborations in Europe and South America to ensure a genuinely multi-national approach to promoting sound practices.
The Woodstock Institute will use its $350,000 MacArthur Award to upgrade technology, develop a strategic plan, and build a cash reserve.
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