Washington, D.C. -- Senator Daniel K. Akaka (D-HI) today introduced two bills that address flaws in the Bankruptcy Reform law. The first bill is the Predatory Payday Loan Prohibition Act, which would prevent federally-insured financial institutions from originating predatory payday loans. Payday loans are small cash loans repaid by borrowers' postdated checks or borrowers' authorizations to make electronic debits against existing financial accounts.

"Industry analysts conservatively estimate that more than 15,000 payday advance locations across America extend about $25 billion in short-term credit to millions of households experiencing cash-flow shortfalls," stated Senator Akaka. "Too many of its customers are low-income, working families. More and more customers are the financially stretched middle class, including people who have maxed out their credit cards, people perhaps who have lost a job, or people with no savings to fall back on during a situation that causes a cash-flow shortfall, such as a medical emergency."

The second bill Senator Akaka introduced today is the Bankruptcy Prevention Credit Counseling Act aimed to prevent unsecured creditors, primarily credit card issuers, from attempting to collect accruing interest and additional fees from consumers in bankruptcy.

Senator Akaka said, "Since the new bankruptcy law requires consumers enter credit counseling before filing for bankruptcy, we must ensure that consumers are given a fair chance at reducing their debt burden."