Some states have banned payday lending completely. Others are in the process of passing legislation that would do the same. In Montana, the nontraditional credit sources have essentially been banned from the state as residents voted to cap interest rates at 36 percent.


As a result, many payday lenders are taking their businesses to other states. Arizona and Ohio have similar restrictions to Montana, and lenders have suffered, writes the Credit Blogger.

But in other states, the payday lending industry is doing well. The number of payday loan stores in Florida has stayed relatively consistent since 2007, even as hundreds of bank branches were closed.

According to The Wall Street Journal, the industry as a whole had about 20,600 loan offices in 2010, down 13 percent from 23,600 in 2007. However, the publication also reports that the amount of consumer credit available at traditional banks is on the decline. The total amount is down 51 percent in 2010 to $433 billion. In 2007, that figure was $887 billion.

As a result, payday lenders must continue to adjust in a market that clearly needs them as government regulations threaten to choke their businesses.

Consumers can help the cause of payday loans by being responsible recipients. They should make sure to repay the loan, borrow the smallest amount possible, only work with a reputable payday lender, limit their reliance on payday loans and borrow from only one lender, writes the website Rebuild.