Short term lending is far from its last breath

Though the government seems to be fighting to close down the short term loan industry, lenders are determined to continue providing consumers with nontraditional credit. According to The Motley Fool, even the Consumer Financial Protection Bureau is joining the crusade. The site explains, however, that the main issue of contention between the loan industry and many government officials is really a non-issue. Website contributor Selena Maranjian explains that it's "just $15, and more attractive than many banks' overdraft fees and other charges." She hopes that smart consumers will be able to tell the difference between a fee of $15 on $100 and an APR near 400 percent for a larger, long-term, traditional loan from a bank or other financial institution. The $15 fee is assessed on a short term loan that lasts just a few weeks at most, while APR on longer-term bank loans is based on an agreement that stretches months or even years. Still, the industry isn't out of the dark. According to Maranjian, short term loan volume fell from 435 billion in 2008 to $30 billion in 2009, and nearly 1,700 shops have closed their doors. Additionally, more states are passing laws that cap short term lending fees at 36 percent. The most recent was Mississippi.