All but nine US states have passed laws to limit the amount of the fast cash advances made available from one payday to the next, and to cap the interest applied. The arguments are easy to roll out. One says that every individual is free to organize their own lives as they think fit. No one forces an individual to borrow.

When they are vulnerable, lenders should be limited in the terms they can offer and enforce. So the odds are you live in a state that controls payday loans. The contract is offered and if the individual decides to sign, he or she has to live with the consequences. For the record, the states with no controls are: Connecticut, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont and West Virginia. In those states, you can borrow significantly larger percentages of your net pay, but you will potentially have to pay higher fees and charges.

In all the states where controls are in place, the laws apply to lenders who make loans secured either on a post-dated check or on the right to deduct an amount from your bank account. So whether you apply for a payday loan online or go into one of the loan shops and write out a check, the regulations apply. Whereas in Mississippi, you can borrow up to $400 from a licensed lender and there are strict rules limiting the fees depending on whether you have borrowed on the security of a check or have given authority to deduct from your checking account. The maximum fee is 18% of the amount borrowed.

Thus, public policy between states varies slightly in the detail, but the general trend is to impose low limits on the amount you can borrow as a payday loan in any emergency. The irony is that the price of protecting people is they are not allowed to borrow significant amounts. Although $300 is better than nothing, many household emergencies involve rather higher numbers. Thus, states are not necessarily being all that helpful because, to raise the additional amounts required, the desperate may be forced into the hands of the real sharks.

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