Discussion, at least 150 words.

How Fair is “Check Into Cash?” In 1993, the first Check IntoCash location opened in Cleveland, Tennessee. Today there are 1,250Check Into Cash centers among an estimated 22,000 payday advancelenders in the United States. There is no doubt about the demandfor such organizations, but the debate continues on the “fairness”of payday-advance loans. A payday loan is a small, unsecured,short-term loan ranging from $100 to $1,000 (depending upon thestate) offered by a payday lender such as Check Into Cash. A paydayloan can solve temporary cash-flow problems without bouncing acheck or incurring late-payment penalties. To receive a paydayadvance, borrowers simply write a personal post-dated check for theamount that they wish to borrow, plus the payday loan fee. CheckInto Cash holds their checks until payday when the loans are eitherpaid off in person or the check is presented to the borrowers’banks for payment. Although payday-advance borrowers usually pay aflat fee in lieu of interest, it is the size of the fee in relationto the amount borrowed that is particularly aggravating toopponents of the pay-day advance industry. A typical fee is %15 forevery $100 borrowed. Payday advance companies that belong to theCommunity Financial Services Association of America (CFSA), anorganization dedicated to promoting responsible regulation of theindustry, limit their member companies to a maximum of fourrollovers of the original amount borrowed. Thus, a borrower whorolled over an initial $100 loan for the maximum of four timeswould accumulate a total of $75 in fees all within a 10-weekperiod. On an annualized basis, the fees would amount to a whopping391%. The 391% is an annual nominal rate {15% x (365/14 weeks). Anannual rate of 391% is a huge cost in relation to interest chargedon home equity loans, personal loans, and even credit cards.However, advocates of the payday-advance industry make thefollowing arguments: Mot payday loan recipients do so eitherbecause funds are unavailable through conventional loans or becausethe payday loan averts a penalty or bank fee which is, in itself,onerous. According to Check Into Cash, the cost for $100 ofoverdraft protection is $26.90, a credit card late fee on $100 is$37, and the late/disconnect fee on a $100 utility bill is $46.16.Bankrate.com reports that non-sufficient funds (NSF) fees average$26.90 per occurrence. A payday advance could be useful, forexample, if you have six outstanding checks at the time you arenotified that the first check has been returned for insufficientfunds and you have been charged an NSF fee of $26. A payday advancecould potentially avert subsequent charges of $26 per check foreach of the remaining five checks and allow you time to rearrangeyour finances. When used judiciously, a payday advance can be aviable option to meet a short-term cash flow problem despite itshigh cost. Used unwisely, or by someone who continuously relies ona payday loan to try to make ends meet, payday advances canseriously harm one’s personal finances. What is your opinion?