Without customers, there is no borrowing and without borrowing, there is no community bank.

Fair to say this applies to payday lending as well.

While the 36 percent APR sounds reasonable, at such a rate the total fee charged on a $100 two-week advance would be $1.38. Payday lenders would not be able to cover the cost of originating a loan, let alone meeting employee payroll and benefits.

A proof point of this is that Goodwill, a non-profit, tax-exempt charity, is charging customers $9.90 per $100 borrowed (252 percent APR) for their “Good Money” payday loans. And this is only to break even.

We must end the payday lending industry’s $33 billion a year profits earned off the labors of hard-working Alabamians.

The industry, of course, earned just over $7 billion in 34 states in 2009.

The vast majority of our customers pay off their advances within two weeks (95 percent of the time), but an extended payment plan offers a safety net for those who have difficulty doing so.

More than 90 percent of customers who choose payday advances say they are satisfied with their experience and value the service. Compare that with the customer satisfaction ratings of banks and credit unions who, last year, charged Alabamians on average $238 in checking account overdraft fees and penalties, according to a study conducted by Bretton Woods Inc.

We are proud to offer a financial service that meets our customers’ financial needs and consistently exceeds their expectations.

There is clearly no way payday lenders can sensibly be blamed for the ills mentioned by the Alabama Poverty Project. There is also no way for a consumer to reach the much-hyped triple-digit interest rate mentioned in the column because a loan cannot be extended for a full year. It is unfair to judge short-term, two-week loans on an annual percentage basis.

Other alternatives to payday lending do not stack up either. Not everyone can turn to a family or friend for an emergency loan. Credit cards, the solution touted by the Alabama Poverty Project, come with steep fees that far exceed the price of a payday loan.

{Payday lending critic} Stetson says clearly in his column that hard working Alabamians “do need access to credit.” No one questions the concept that a working mother should be able to borrow $200 to pay an unexpected doctor’s bill, or that the guy delivering your paper should have access to a $100 loan to replace a blown-out tire so that he can go back to work tomorrow. The question has become how do we as a society best provide short term credit.

Stetson points to Arkansas and Georgia as leaders on this issue. In recent years, both Georgia and Arkansas have put legislative or judicial restrictions on payday lenders that have completely put them out of business. So what has that meant for the people who used short term loans? No studies have been done yet in Arkansas, but the Federal Reserve took a thorough look at Georgia and reported that “The increase in bounced checks (where payday loans were banned) represents a potentially huge transfer from depositors to banks and credit unions. Banning payday loans did not save Georgian households $154 million per year, as the CRL [Center for Responsible Lending] projected, it cost them millions per year in returned check fees.”

In other words, the paper delivery guy wrote a check for the tire he had to have and paid between $28 and $40 in fees to his bank or credit union for covering that check. If he could have taken out a payday loan, it would have only cost him $17.50.

One would certainly hope that some form of corrective legislation is passed soon. One would hope that the ASHL will approve and pass on to the governor and the Legislature a payday loan resolution, and that the Legislature, when it meets in regular session, will enact the appropriate measures to protect the citizens of the state against the usurers.

And what will the legislature do to make sure citizens have access to short-term credit?