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11 T.M. Cooley J. Prac. & Clinical L. 417 (2009)
Regulating the Payday Lending Industry: Has Michigan Made a Step in the Right Direction

handle is hein.journals/tmcjpcl11 and id is 423 raw text is: REGULATING THE PAYDAY LENDING INDUSTRY:
Peder Rigsby*
Our society seems to embrace the notion of buy now and pay
later.' Studies show that American households, on average, have
increased their overall debt-to-income ratio.2 But what happens when
we do not have the money to buy groceries or pay the rent? Get cash
now!  Don't wait till payday! You see the advertisements for this
type of lending all the time offering cash-strapped consumers money
now-for a fee-in exchange for a postdated check that generally
coincides with the date that the consumer receives his next paycheck.3
Since its inception, the practice of payday lending has become more
prevalent in our society as an alternative banking method.4 At the end
of 2006, there were about 25,000 payday lenders (PDLs) operating in
the U.S. with a reported annual loan volume of at least $28 billion
and $5 billion in loan fees that year.5 In Michigan, between June
* Peder Rigsby is a J.D. candidate at Thomas M. Cooley Law School, May 2010.
He received his B.S. in 2006 from Portland State University in Portland, Oregon,
in Business Management. I am deeply greatly for the love and support of my wife,
Shauna Rigsby. Without her support, this Article would not have been possible.
'See Aimee A. Minnich, Rational Regulation of Payday Lending, 16 KAN. J.L. &
PUB. POL'Y 84, 84 (2006).
21d. (explaining that the average household debt-to-income ratio rose from 24% in
1975 to 104% in 1998).
3Tara Shinnick, Annotation, State Regulation ofPayday Loans, 29 A.L.R. 6th 461,
461 (2007). A payday loan is also sometimes referred to as a payday advance or
a deferred presentment transaction because the lender is deferring cashing the con-
sumer's check until a specified time. Id. at 469 n. 1.
4See Pearl Chin, PayDay Loans: The Casefor Federal Legislation, 2004 U. ILL. L.
REv. 723, 726-28 (2004).
'Consumer Federation of America (CFA), PayDay Loan Consumer Information,
http://www.paydayloaninfo.org/facts.asp (last visited May 1, 2009) [Hereinafter

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