To better illustrate the ignorance behind the critics of payday loans, I have written this fictitious anecdote for your enjoyment. Hopefully the meaning jumps out at you.

Tom is a college student who rents a room from a house. He has four other roommates who also rent rooms from the house. Each month, the five students pay their rent to Rick, the owner of the home. Rick then uses the rent money to pay the mortgage on the house.

Tom was great about paying his rent, and his part time job as a waiter helped him pay all of his bills. Unfortunately, his rent was due three days before he got paid this month. Rick really needed them to pay rent on time because he couldn't afford the mortgage without their rent payments.

Tom decided to write a check to Rick anyway, hoping he wouldn't deposit it until after Tom's paycheck deposited. But Rick really needed to pay that mortgage on time, so the day after he got the rent checks from the tenants, he wrote a check for the mortgage and got everything taken care of.

Or so he thought. Tom's check didn't clear and bounced. Tom got slapped with a bounced check fee, returned check fee, overdraft fee and non sufficient funds fee from his bank. At the same time, Rick didn't deposit enough without Tom's rent payment, so Rick's check bounced and he got slapped with the same fees.

So not only did Tom have to now pay for his own $74 in fees from his bank, he had to cover Rick's $74 in fees as well. After getting rent eventually to Rick, who benevolently didn't enforce a late fee, and after paying off the other fees, Tom's paycheck was all but spent.

The ironic thing to Tom is that only two months earlier all payday lenders were put out of business by a new law. Normally he would have gone and just borrowed a couple hundred dollars for those few days and paid the few dollars in fees.

But lobbyists, consumer advocates and lawmakers decided that payday lenders were ripping Tom off, so they protected him by putting them all out of business. Thank goodness Tom only had to pay $148 in bank fees instead of the $6 it would have cost to borrow $300 for two days.

This story may be fictitious, but these things happen to all sorts of people everyday. Prohibit payday loans and more people will get ripped off by bank fees.