thousands of jobs as well. In fact a recent study shows that payday loans cause roughly fifty-five thousand bankruptcies per year. Tell us what we don’t know.

When you put the softest possible spin on payday loans, you could say, at least in theory, that payday loans meet a real need for emergency cash, allowing borrowers to obtain short term cash advances on wages during pressing circumstances. Oregon and Washington consumers secure these loans by providing a postdated check or electronic access to their bank account. While this practice sounds harmless enough, the reality is that the terms of these short term loans have wrecked the lives of consumers throughout the Pacific Northwest.

The loans carry nearly unspeakably burdensome rates, often ranging from 200 percent to 500 percent. Loan sharks should do so well. Moreover, your average pay day loan borrower takes out eight of these loans per year. On an average loan size of $375, borrowers will pay about $520 in interest. Since the average payday borrower can only repay about a hundred a month, taking out a payday loan almost always touches off a cycle of taking out more payday loans to pay off old payday loans.

Though most payday lenders are storefront or Web operations, major banks have gotten in on the action. Both US Bank and Wells Fargo offer pay day loans under different brand names with interest rates that might shock their day to day clientele. Moreover, banks such as Bank of America and JP Morgan Chase have profited enormously by allowing payday lenders to make withdrawals. Because payday loan borrowers are twice as likely to incur overdraft fees, pay day loans are extremely profitable to the banks that allow these withdrawals.