Woodstock Institute believes that
when financial products are responsible, they provide a valuable service and
build a long-term relationship between financial institutions and consumers. 
When they are transparent, customers are free to choose the best option for
their financial situation.  But too, often financial products are neither
responsible nor transparent. 

For example, the unregulated
consumer installment loan industry, in an effort to evade short-term loan
consumer protections, has developed the payday
installment loan
.  These are extremely high-cost, long-term loan products
with rates as high as 1,100 percent—not for a short-term loan, but for loans as
loan as six months.  With outrageous interest rates, even by payday loan
standards, along with insurmountable balloon payments, these products are
hazardous to consumers’ financial health.

Even when interest rates are clear,
add-on costs for junk insurance and unrelated membership fees can push an
otherwise affordable loan into the triple digits.  In Illinois, 46
percent of consumer loan companies
offer these types of add-on insurance
products, with little oversight.

The Financial Products Safety
Commission would review these types of products and ensure that any financial
product, from credit cards to payday loans, meets a minimum safety