Online Vendors Fight Regulation

Last year the Los Angeles Times ran a story, more in middle class using payday lenders. It was about how short-term loan stores are proliferating in suburban areas throughout California, raking in the cash from desperate Americans down on the luck, or victims of the downturn in the economy.
http://articles.latimes.com/2008/dec/24/business/fi-payday24?pg=2

According to the Times American are paying more than 10 times the amount they borrow to pay back these payday lenders. By some estimates $50 billion is paid on as much as $8 billion a year, which amounts to interest rates of about 500% or more. Some states have begun to pass laws limiting these outrageous rates for quick money loans that seem to exploit families with bad credit, or those trapped in a financial bind by the dire economic conditions. Dick Durbin, a Senator from Illinois has introduced a bill, Protecting Consumers from Unreasonable Credit Rates Act, which is on the way to the Senate Banking Committee where it will be reviewed. The proposed bill would be a national cap of 36% on interest rates.