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Edition: Final Since then, the industry's renegades have exploited a federal loophole to keep prowling for business here. Their business model is to allow borrowers to obtain cash by writing postdated checks, which aren't cashed until after the customer's next payday. Credit history isn't an issue with these companies, but the 15 percent fees they typically charge amount to triple-digit annual interest rates. All too often, it's low-wage earners -- folks without bank accounts and credit cards -- who are trapped in one costly loan after another. A new study by the Center for Responsible Lending shows that in North Carolina, payday lenders have concentrated in neighborhoods with large numbers of African-Americans. With 22,000 outlets nationwide, about 400 of them in this state, this relatively young industry now hauls in profits of $6 billion a year. Some of that money is expected to be invested in lobbying for a law sanctioning the business in North Carolina. Tugging in the opposite direction are consumer groups, which have filed five lawsuits against payday lenders operating here through out-of-state banks. Whatever they do, lawmakers shouldn't provide these lenders aid and comfort. Any enabling statute must go beyond keeping loans small. North Carolina must hold down fees, forbid payment of one payday loan with another, and prohibit lending to someone indebted to another payday lender. An industry must be willing to play fair with its customers before it is welcomed here or in any other state.
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