Payday loans
Making payday loans, short term loans for those whose paychecks don't last them between paydays, is a small industry but it's growing fast and concentrating in a handful of companies. Basically, the opertaion is legalized loan sharking, with outrageous interest rates (15% per month and higher) exploiting the working poor who can't wait till payday.
These companies, mostly private, set up shop in working class neighborhoods and they are very profitable. How profitable is not clear, since most of them, are privately held. In most states (New York and Massachusetts are notable exceptions), usury laws have been abolished and these companies have taken over were banks fear to tread. As a Slatre.com article ("How the Other Half Banks," 5/10/2004) notes, "they won't break your legs if you don't pay, only break your credit rating." And after all, even the outrageous rates for small loans can be less than the $70 or $60 penalties many commercial banks are assessing for bounced checks or, worse, the penalties for knowingly writing a bad check.
The number of outlets offering these has doubled over the last five years. The players include:
- Advance America, which has over 2,000 locations in 35 states
- Check 'n Go, which has 900 stores in 30 states. It opened 100 stores last year and plans to open 100 more this year.
- Check into Cash, which has 700 stores in 30 states
- Dollar Financial, which has 1,000 stores, mostly in the US but also in Canada and the UK, with names like Loan Mart and the Money Store. The company will soon go public, and Wall Street is excited. With financing, expect it to grow fast, perhaps buying out own of its rivals.
9:30:33 PM 
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