Over the past seven years, there has been a sharp increase in consumer fraud and scams, predatory lending, and unfair debt collection practices. Predatory lending is "any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through deceptive, coercive, exploitative, or unscrupulous actions for a loan that a borrower doesn't need, doesn't want, or can't afford." Many low-income debtors are especially vulnerable to debt scams, including high up-front fees, penalties for early payoffs, inflated interest rates, and "deals" targeting senior citizens, low-income borrowers, and people with poor credit.
What can foundations do?
- Identify grant programs that could have improved outcomes by adding civil legal aid partners. As you review applications, look for issues that have legal aspects (family issues, housing, homelessness, employment, consumer issues).
- Provide general support for legal aid groups that support your community.
- Partner with legal aid providers to develop targeted programs, such as public education about consumer abuses and available protections.
- Fund or disseminate research on the impact of predatory lending in your community.
What is civil legal aid?
According to the U.S. Dept of Justice Access to Justice Initiative, civil legal aid is free legal assistance to low- and middle-income people who have [non-criminal] legal problems. These problems are non-criminal; rather, civil legal aid helps people access basic necessities such as healthcare, housing, government benefits, employment and educational services. Civil legal aid is provided free of charge by nonprofit legal aid organizations, 'pro bono' volunteers (attorneys, law students and paralegals), law schools, court-based services such as self-help centers, and online technologies such as document assembly and legal information websites.
This report is part of a series of three issue briefs on Civil Legal Aid, created in partnership between Indiana Philanthropy Alliance and Indiana Bar Foundation.