One reason for online payday loan growth is that it is more difficult to regulate such companies than brick-and-mortar stores, said Tom Feltner, policy director for Woodstock Institute, an economic development non-profit that has studied the industry.

Last month, for example, Cash America said it would close a third of its Ohio stores due to tougher state restrictions. Advance America, another leading payday lender, also said it might have to trim its Ohio network.

Legislators take heed.  If you want a tightly regulated industry, don’t force storefront lenders to shut down.  Consumers need short-term credit and will find it on the Internet. 

According to a financial literacy survey by the Center for Economic and Entrepreneurial Literacy, which advocates personal finance education, just a quarter of adults knew that overdrawing their checking account, or bouncing a check, for a quick $100 was more expensive than a payday loan, credit card advance or emergency wire transfer. More than half said they thought a payday loan would be pricier.

Understanding the cost of a mortgage was another challenge. Only a third knew that a home buyer could expect to pay $350,000 in interest for a $300,000 house over the course of a 30-year mortgage with a 6 percent yearly interest rate.

The Payday Pundit bets that a survey of payday loan customers would show that they know payday loans are less costly than bounced check fees and overdraft protection.

“We know more about what’s going on with the economy than the Federal Reserve Bank,” said David Schoeneman {pawnshop owner}, who first noticed traffic inching upward at his Chicago Heights store about nine months ago. Gas prices have dipped recently, but any relief has been counteracted by new job woes, he said.

The whole story is worth a read.

“[Newspapers] [s]urround a simple outrage, overreport it, claim credit for breaking it, make sure [they] find a villain, then claim [they] affected change as a result of [their] coverage. Do it in a five-part series, and make sure [they] get ‘the [our paper] has learned’ in the second graph.”

Are any of the papers doing this?  For a hint, let’s look at a recent interview of the Chicago Tribune’s Steve Franklin.  The Tribune has been running a series called “Cashed Out” (about payday loans and other “trap doors” in the economy).  Franklin’s responses that seem to follow “the formula” are bolded:

“There is a lot of finger-pointing today about what’s gone wrong with the economy, and this is one small attempt to show specifically why this cycle is different than before.”

“In the early reporting, the lack of state laws or regulation dealing with high interest lenders helped make the stories more pertinent.”

“And this seems to be a problem as the financial crisis grows and new industries are created that claim to offer solutions for troubled consumers.”

“We do have more time and we intend to keep trying to look for new angles, new data, new ways of making the points compelling and important.”

“This week U.S. Sen. Dick Durbin [D-Ill.] introduced a bill capping “excessive” interest rates for payday loans and car title loans, and in doing so pointed to one our stories which talks about this.“

Payday Pundit hopes that Pulitzer Prize is worth limiting the financial options of thousands of the Tribune’s readers.

The risks and benefits of so-called payday lending are certainly worthwhile of media coverage, and genuine instances of fraud or exploitation are and should be fodder for criticism in the print media. But it helps when your highlighted victim actually has good credit to start with and/or isn’t consistently turning to Internet loans to supplement income.

The rest of NewsBusters piece is here.

Consumers have a right to determine their own financial destiny and make their own choices for what’s best for their financial situation and their families.

The Payday Pundit knows nothing about AmeriCash, but I think this article proves that there’s no winning with consumer groups.