Despite pressure from community leaders around the country the payday lending industry insists that not only is it a needed short term loan resource, it is actually beneficial to the demographic it serves. The payday lending industry argues that its high interest, short term loans provide the only reliable and legal way for poor debtors with little or no credit to gain access to cash they need in an emergency.

But the reality is that the payday lending industry exploits an open wound that is festering in this recession. Many underprivileged debtors have suffered reduced income in the past few years and are using debt, including payday loans to bridge the gap between the income they earn and their expenses.

Many of the debtors who depend on payday loans are leaning on payday loans for emergencies, medical expenses sudden vehicle repair needs and other basic life crises that eventually come up for all of us. It’s not that the concept of short term loans if flawed, it’s that the payday lending industry uses the desperation of poor debtors to entrap them in an endless cycle of high interest debt which is designed to bilk them of their meager earnings. Right now, many legislators are beginning to recognize the danger of payday loans and have begun putting restrictions in place.
But there are still others who hesitate when restricting the payday lending industry because they don’t want to “cuff” business. While not cuffing business is understandable, we need to look at the negative effects of payday loans as not the collateral of doing business but as a humanitarian issue.

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