Thanh Truong / Eyewitness News
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NEWORLEANS- You'll see them in many neighborhoods throughout Metro New Orleans. Payday loan companies are ubiquitous at many strip malls.

The 'quick cash' agencies often promise fast money services including cash checking, money orders and loans. According to AARP Louisiana, the aging population is increasingly signing up for such loans.

'Some of these folks have to find ways to pay for their meds, how to pay for their food, I mean they have to stretch that dollar,' said Rafael Saddy, with AARP Louisiana.

In simple terms, payday loans offer a quick line of credit with quick cash advances. Critics of such payday lenders say the 'simple' loans are often accompanied by outrageous fees and interest rates, which can put the borrower further in debt. AARP Louisiana recently lobbied Louisiana state lawmakers to cap interest rates on payday loans at 36 percent. Those efforts seemed to have failed as House Bill 766 advanced with no mention of interest rate caps which have been passed in other states including Georgia and North Carolina.

'Right now in Louisiana it's about 400 percent, so that's how borrowers really get caught in the cycle. Once they take out a loan, they have to take out another one to pay off the first loan. We at AARP think it's a predatory practice by the lenders,' said Jason Tudor of AARP Louisiana.

Troy McCullen is the CEO/President of Finance America of Louisiana. He oversees more than 30 payday loan companies in the state. McCullen says to label lenders as 'predatory' is unfounded. From McCullen's perspective, the terms of the loans are clear and borrowers understand the conditions.

'Our fees, don't compound, they don't roll over they don't grow and all of these things that are said,' McCullen said.

Had the 36 percent cap on interest rates gone through, McCullen claims it would have effectively shut down an industry that is providing families with financial services when all others have failed. According to the Office of Financial Institutions which regulates payday loan institutions in Louisiana there is a demand for the service. Last year, Louisiana residents took out 3,126,278 payday loans. From those roughly 3 million loans, borrowers paid $145,665,345 in loan fees and interest. The loans also caused checks to bounce. According to the OFI, payday lending was directly responsible for 154,227 bounced checks. The payday industry collected $2,552,974 in additional fees from those bounced checks.

'All the research shows, that 98 percent that use our service are happy, they like our service they don't want us go away,' said McCullen.

There is one point McCullen and his opponents agree on, reform is needed. How exactly to balance consumer interests and those of the lending industry is unclear. Members of AARP urge anyone interested in pursuing payday loans to read the fine print before doing so.

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