Payday Lending: Still Going, and Going, and Going...

Bob Geary of the Independent Weekly reports that payday lending in North Carolina is alive and well. This upstanding "industry" preys on people living paycheck-to-paycheck, giving them "advances" on future wages with effective interest rates of up to 400 percent. In 1997, the state implemented an "experimental" law allowing payday lending; but four years later, after another fight in the legislature, the experiment was allowed to expire, making the practice once again illegal in the state. While most smaller, mom'n'pop loan sharks were put out of business, major outfits like Advance America (with 2004 revenues in excess of $500 million) have used a variety of legal dodges to continue their predations in the state, earning more money every year: payday lending, Bob says, is now a $40 billion a year business nationwide.

We would be remiss, by the way, not to note that a team of writers at Southern Exposure, led by investigative reporter Mike Hudson, turned out the first major exposé of the predatory lending industry, "Poverty, Inc.," back in 1993 (nominated for a National Magazine Award). A decade later we followed up with the George Polk Award-winning "Banking on Misery," another package of stories (again featuring several writers coordinated by Mike) that dealt with auto financing, the credit card industry, and Citicorp, the last showing how the global financial giant was built largely on the backs of poor, disadvantaged consumers inveigled into unfair and misleading mortgages. (Never miss an opportunity to plug ourselves, do we?)