On Thursday, April 2, 2009 members of the House subcommittee on Financial services addressed the issue of payday loans. At issue is whether Congress should effectively prohibit such loans by placing a 36% APR on them or to allow these loans to continue to exist but under heavy federal regulations.

The committee acknowledged that the demand and need for the short-term loan product was undeniable and that these loans are often a last line of credit for many Americans. This statement is especially true in light of many banks, credit unions, and other lending institutions who for one reason or another have limited many borrowers access to credit.

Thursday’s hearing showed that these loans serve a useful purpose in today’s society.