Payday Lending Part II: the state of the industry today

In the last year, there has been a lot of movement afoot in state governments to either quash payday lending establishments or at least force them to bring down their interest rates. Here's a quick snapshot of how things are going -- or not going.

California: Earlier this month, just as legislators were going to vote on a bill that would have forced payday loan stores to cap their annual interest at 36%, they pulled back. That would have effectively meant that for every $100 a consumer borrowed, he would only have to pay back that $100 plus $1.60 within a two week period.

Oregon:Last July, a 36% annual cap was put on the payday lending industry, and 80% of the stores closed up and went out of business.

Illinois: In 2005, the state put forth many regulations for payday loans under 120 days. So lenders stopped issuing short-term loans and went for loans longer than 120, meaning their customers wind up paying more and going into more debt.

Ohio: They're currently trying to pass House Bill 333, which would do what California was trying to do.

Georgia: Since 2004, payday lending has been a felony. North Carolina has also banned the practice. All in all, there are 13 states in America that have banned or virtually wiped out the industry in their own states: Oregon, Arkansas, Connecticut, Georgia, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Vermont and West Virginia. They're also illegal in the Virgin Islands and Puerto Rico.

And our neighbors to the north? Just as the payday loan stores are popping up everywhere in Canada, partially due to the influx of Americans going north to get cash, many provinces like Ontario are looking into legislation to regulate the industry.

Geoff Williams is a business journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).