March 13, 2006
CBS News Channel 19

COLUMBIA, S.C. - "The payday loan business is blowing up," laughs Vanetta McKie. "I mean, you look around and you see payday advances everywhere."

Vanetta knows what she's talking about. A payday lender for six years at UpTown Cash in Columbia, she's seen the explosion.

"It's quick, it's easy and it's available for you right then, no hassle," she explains.

It's a fact that's sold more than four million loans and helped launch 1,101 payday lenders in South Carolina. To put it in perspective, that's six times the number of McDonald's in the entire state.

"It's pretty remarkable to think that something as detrimental as taking out a loan is that much more prevalent than getting a hamburger in our state," says Sue Berkowitz.

Sue is the director of the Appleseed Justice Center, a non-profit organization that represents low income residents.

"It's the same people who are borrowing over and over again because they get into this debt cycle and into this crisis," she says.

Sue adds, she fears it will only get worse. North Carolina and Georgia have banned payday lending, forcing some businesses to cross state lines, making an already booming business not only bigger, but more concentrated.

"I say maybe 80% of the time, they do have other advances out and so that just gives us the indication that we can only give them so much because we don't want to over-extend them," Vanetta says.

Sue, though, doesn't think it's enough. "If we have to have payday loans, then we have to have certain protections in place."

In 2004, payday lenders in our state gave out more than four million loans and earned 150 million in fees.

Sue says she's tried to push legislation to outlaw the business, but that legislators are reluctant.