Payday lending operations have grown rapidly in the United States since the early 1990s. At the industry’s peak a few years ago, there were more payday lenders in the United States than McDonald’s and Burger King stores — combined.
“The payday lender is kind of the emergency banker for the working poor,” explains journalist Gary Rivlin. “The idea is that you have some bills that you have to pay today — your check isn’t coming for a couple weeks, and you can take a loan out against that upcoming check.”
In return, a person agrees to pay interest on the loan — which can be up to “200 percent interest or more on their money,” Rivlin says. “It’s a bridge loan to cover a gap, but the problem is, the gap keeps getting wider and wider.”