An epic battle is being waged between the payday loan industry on the one hand and consumer advocate groups on the other. The payday lenders argue that they provide an important service that helps people who experience short term financial setbacks. The consumer groups counter that the lenders are gouging consumers with fees that translate into interest rates that can exceed 1,000% on an annual basis. Payday lenders retort that short term loans are expensive to process and manage, and that charging lower fees is not economically feasible. Add to this the debate of chronic, repeat borrowers, and the battle between these two groups just escalates.
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