While some payday loans are indeed helpful, many of them are criminal. In urban areas, they lure lower-class people in with friendly faces only to screw them over in the long run [such as 300%+ interest on a loan]. I know of one couple who ignorantly took out one of these loans [for $500] and it nearly cost them their house. It's a lucrative business, however, so they don't appreciate when the government attempts to regulate their activities. The Ohio legislature passed House Bill 545 last month, which caps annual interest rates on payday loans at 28 percent. The old limit was 391%. So today, workers for these institutions protested in Columbus, saying that this will drive payday loan establishments out of business, netting 6,000 lost jobs for our state.
First, coming from an industry that loves to play games with numbers, I just can't buy that figure as accurate. Second, if the only way an industry can stay in business is to take advantage of people in a tight spot, then I'm not sure it's the best thing that it continues to exist anyway.
As the economy continues to struggle, the implications of predatory lending here will begin to ripple throughout higher economic strata. If this industry isn't reigned in now, things could get really ugly.