Pacific Financial, a loan chain based in Washington, agreed to pay a $2.5 million settlement to over 10,000 who were harrassed after they were late repaying their payday loans. The ruling ends a three year case that included customers who defaulted between 2001 and 2005.

It is important to understand that there are two types of payday lenders. There are lenders such as Pacific Financial, who operates as Loan Ex, Fast Cash Loans and Fast Cash, that disregard the regulations on the industry. Then there are lenders like Check City, who not only comply with all laws and regulations in the industry, but pushes to make sure other lenders do as well.

The collection tactics employed by Pacific Financial were admittedly illegal. When collecting from defaulted borrowers, there are certain rules collectors must follow.

These include not threatening borrowers with arrest and jail time, not using profane language, not continually calling at work and not disclosing the terms of the borrowers loan debt to other parties. Pacific Financial engaged in some of these practices and is no paying the price.

Unfortunately, the whole industry pays a price as well. When one payday lender engages in this behavior, it reflects badly on all payday lenders, even those of us in compliance with the law. Check City definitively avoids harrassing collection practices. Complying with all laws and regulations is very important to us.

We would hope that legislators take this into account during their legislative sessions. An entire industry does not need to be punished for the irresponsible actions of a few. There are plenty of good, honest payday lenders and borrowers out there. There are also bad, dishonest lenders and borrowers.

Let's urge our legislators not to put the good, honest ones out of business. Payday loans fill a valuable niche in our economy and should be allowed to continue doing that without endless interference.