While Toni Czajkowski, a readers of The Herald-Leader, is thankful for recent insight from the newspaper into the recent military payday loan debate, he recently wrote a response to such an article.

In it, Czajkowski didn't simply focus on the interest rates attached to cash advance loans that focus on the armed services. We'll paraphrase his letter to the editor below …

Thanks to The Herald-Leader for its detailed explanation of the legislation regarding military payday loans. It seems to me that 36 percent interest is more than enough for the lenders to cover their risks.

What is the rate of default on such bad credit payday loans? What is the cost to administer them? Maybe we need to compare them with those of other lenders.

But the bigger questions are: Why do men and women in our military live paycheck to paycheck? And worse, why do they need these short-term no fax cash advance loans to make it to the next paycheck?

Why do military families need food stamps? Especially while contractors get paid thousands of dollars a day to paint schools and to not build hospitals in Iraq?

We should be outraged by the Bush administration's irresponsible fiscal policies. The priorities of the administration and members of Congress, such as Geoff Davis, do not match the priorities of working American families.

The fascist theocracy is only serving at the pleasure of the voters. Get rid of them all.

Darrin Anderson is president of the Community Financial Services Association of America. He recently wrote in to USA Today in response to an article in the newspaper regarding cash advance regulations.

Here's a summation of what he had to say:

Like most successful businesses in America, the payday advance industry exists because we offer our customers a product that is more desirable than the alternatives.

Although 100% of cash loan customers have a checking account at a bank or credit union, they turn to payday lenders for their short-term credit needs. Traditional lenders simply do not meet the demand for small, short-term loans.

USA Today's call for interest rate caps and other restrictions would result in the elimination of an affordable credit choice. Policymakers in 37 states and the District of Columbia have debated the issue and passed strong consumer protections. They recognize that eliminating a choice does not eliminate the need for short-term credit.

Why do individuals choose online cash loans? Because they cost less than bouncing a check or paying overdraft fees, late bill penalties or credit card late fees,;and it's more desirable than asking family for money or pledging personal possessions.

Payday advance customers are the heart of America's middle class - educated, hard-working adults who often need access to short-term credit. They understand the fees and are capable of comparing the cost of a payday advance with alternatives.

For each $100 advanced, customers pay a typical fee of $15. On average, bounced check fees are $27.04, credit card late fees are $32.61 and merchant-returned check fees are $26.64. Is a payday advance loan the right choice in every situation? Not necessarily.

Just as a taxi cab is not the right choice for a cross-country trip, but a good choice for a ride across town, a payday advance can be the best choice for someone short of cash before payday.

Instead of limiting options, a better solution is to keep freedom of choice for consumers. As USA Today recently reported, credit unions and banks are already attempting to develop their own short-term credit products that are similar to no faxing payday loans. We welcome their entry and believe competition is good for consumers.

Americans are best served when they have access to a variety of regulated options and are trusted to make financial decisions based on what's best for them and their families in different situations.

An opinion piece in The Daily Press over the weekend talked about the upcoming legislative session in Virginia. It specifically focused on the ongoing attempts to regulate payday loans in the state …

On Tuesday, a special meeting of the House Commerce and Labor Committee, chaired by Del. Harvey B. Morgan of Middlesex, will hear testimony about [instant cash loans].

The three-part public session will give the floor for the first hour to the Virginia Partnership to Encourage Responsible Lending, a coalition of 22 groups committed to fair lending practices in the state.

Rather than trying to slap new regulations on the regular and faxless cash advance industry, the group is working for the repeal of the Payday Loan Act of 2002. If successful, this would place payday lenders under the Consumer Finance Act, which regulates other loans.

That would effectively establish an annual interest rate cap of 36 percent on small loans; currently the annual percentage rate on payday loans, which in Virginia can be no more than $500 each, averages 340 percent - almost 10 times higher than what the rate would be under repeal.

In the second part of the session, representatives of the bad credit payday loan industry will have their say. The final hour is reserved for a discussion and question-and-answer session by legislators.

With better organization and through increased education about the effects of the payday advance loan business, supporters of repeal hope they'll be able to bring the business into accordance with Virginia's other lending laws. It's a worthy objective, one that would help protect those who live paycheck to paycheck from entering a ruinous debt cycle

Unaware that such a demand existed, more and more credit unions in Oregon are beginning to offer cash loans to their members.

"We didn't realize there was such a demand within our own membership," said Bob Corwin, the executive president of Beaverton-based First Tech Credit Union.

Of the 85 credit unions in Oregon, First Tech is among two dozen that offer payday-type lending, according to the Credit Union Association of Oregon and an article in The Statesman Journal.

Corwin's credit union began offering the new loans in June 2004 after its regulatory agency found that many of its members were using outside payday loan outlets. Members of First Tech can quality for a percentage of their paycheck.

They can be loaned as much as $500 for as many as 30 days on an 18 percent annual rate. The personal loan must also be paid off by the member's next payroll date. For the 133,000-member credit union, about 700 salary-advanced loans are outstanding at any given time, Corwin said.

A growing need for payday loans: The payday lending niche has grown rapidly. In Oregon, the number of no fax cash loan outlets has nearly doubled within the last five years, according to the Department of Consumer and Business Services.

Corwin said he understands why people would turn to payday lenders, but many don't realize that they could qualify for loans already offered by credit unions.

"If (customers) show a pay stub, they know it'll qualify," Corwin said.

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An agreement reached Friday by Congress to cap the interest rates that cash advance companies charge to military personnel or their spouses drew praise from those who work with cash-strapped soldiers at Camp Pendleton in California.

A General Accountability Office study released last month estimated that up to 19 percent of military personnel took out a quick cash loan last year. The loans averaged $350; were due in full typically on the next payday in 14 days; and carried annual interest rates and fees totaling 390 percent to 780 percent.

Michael Hire, who runs the Camp Pendleton office of the Navy-Marine Corps Relief Society, said such courses of action led to significant debt in the long run.

"We don't see that these payday advance businesses have helped service members out of financial difficulty," Hire said. "They have solved an immediate problem … but they are charging exorbitant rates."

Hire, who teaches on-base financial seminars for troops, did acknowledge that some military members like the no-questions, no-hassles process offered by the payday advance companies.

Robert "Camo" Gleisberg, membership development officer for Pacific Marine Credit Union branch office at Camp Pendleton, agreed, saying many soldiers - especially those returning from deployment - have "very aggressive spending habits."

"They live beyond their means for a long period of time, then something blows up in their face or they make it worse by going to a predatory lending business," Gleisberg said.

The interest cap agreed to by House and Senate Republicans was to be approved as part of the 2007 defense authorization act.

The Community Financial Services Association of America, which represents more than half of the country's estimated 22,000 fast cash advance lenders, criticized the measure, saying military personnel only constitute 1.3 percent of the industry's revenue.

"While this will only have a slight impact on our industry's bottom line, it will have a large adverse impact on individuals in the military who need short-term credit," association president Darrin Andersen said in a written statement issued Friday.

Anderson argued that the limit eliminates option for soldiers in need of short-term credit. However, groups such as the Consumer Federation of American applauded Congress for agreeing to the legislation on cash advance loans.

"This historic legislation will protect members of the military and their families from financial predators who destroy their finances, damage their morale and undermine military readiness," Jean Ann Fox, the group's director of consumer protection, said in news release.

Here's a paraphrasing of a recent editorial in The Leader-Post:

There are currently about 1,300 cash loan lenders in Canada. They generate annual revenues of more than $1 billion. Last year, in a case in which two companies were suing customers who had defaulted on their loans, an Ottawa judge called the interest rates being charged "unconscionably usurious."

In one case, as the result of compound interest and penalties, a $280 loan rose to $551 in a month. That's an annualized rate of more than 2,000 percent.

The problem is that at present, the industry is largely unregulated. While the provinces are responsible for setting the rules that regulate how providers of cash loans online operate, they cannot set a limit on interest rates. That falls under the federal government's Criminal Code, which limits annual interest rates to 60 per cent.

Most payday lenders usually keep their interest rates right around 60 percent, but then add on fees and extra charges they claim are not "interest."

The result is rates significantly above the limit.

But because provincial authorities and police were uncertain they could make charges stick, so far only one charge of levying criminal interest rates has been laid, in Manitoba.

A number of provinces, including Saskatchewan, believe the best way out of this dilemma is for the federal government to give them the right to all regulation of the faxless cash advance industry, including interest rates.

Indeed, Manitoba has introduced a bill to limit interest rates, but it can't proceed with the legislation until the federal government gives it the authority to do so. Federal Finance Minister Vic Toews is looking at the issue and, according to a spokesperson for his office, legislation can be expected "soon."

That's good news. Those who are compelled to turn to bad credit payday loan lenders deserve to be protected.