"We believe that a loan shark in banker's clothes is still a loan shark," Cooper said. "The only service they'll provide is to make Wall Street investors a lot richer. This is about increasing stockholder profits."
Industry officials dismiss such complaints. They contend that they provide a needed service to consumers who are making informed choices, in their own best interests.
Sam Choate, vice president and general counsel with Check Into Cash, based in Cleveland, Tenn., whose company has 473 outlets in 15 states, said people who occasionally run short of cash between paychecks need a convenient way to borrow small sums.
The loans are usually $100 to $200 for two weeks, at a cost of $15 to $18 per $100 borrowed, he said. Alternatives, such as hocking personal items at a pawnshop or begging a loan from relatives, can be demeaning, he said.
"The real story here is that consumer advocates don't trust consumers, so what they want to do is take this choice away from consumers," Choate said. "I think that's paternalism. We're making money because we have a product consumers want. People don't want you telling them what to do with their money."
Choate and other payday lenders said it isn't fair to quantify the fees charged in terms of annual percentage rates because payday loans are intended to be for short terms. The fees are justified based on the risks for what amounts to a signature loan and the costs of establishing a store and processing the transactions, they say.
Regardless of what the General Assembly does on the issue, payday lending chains could be moving into Maryland because of a recent trend of payday lenders affiliating with federally chartered banks.
The chains act as a service agent for the banks, which can "export" interest rates allowed in the states where they are based to loans made in other states. A payday lender affiliated with an out-of-state bank, therefore, would not be subject to Maryland's 33 percent ceiling on interest rate charges.
Norrington, whose ACE Cash Express has 950 stores in 29 states, said his company recently teamed up with Goleta National Bank near Santa Barbara, Calif., and hopes by midyear to be offering payday lending throughout its network of stores.
Among the states, he said, are Maryland, where ACE Cash Express has 40 outlets that cash checks, sell money orders and provide other financial services, but do not make payday loans.
"For us, it's just another line on the menu board, just another service for our customers," Norrington said. "If it enables us to broaden our services to customers, we'd like to do it."
House of Delegates meets, 11 a.m., House chamber.
Senate meets, 11 a.m., Senate chamber.
Senate Finance Committee hearing on SB 202, to require that "prevailing wages" be paid on school construction projects, 1 p.m., Senate office building, Presidential Wing.