The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins.

You see, the flow of credit is the lifeblood of our economy. The ability to get a loan is how you finance the purchase of everything from a home to a car to a college education; how stores stock their shelves, farms buy equipment, and businesses make payroll.

But credit has stopped flowing the way it should. Too many bad loans from the housing crisis have made their way onto the books of too many banks. With so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses, or to each other. When there is no lending, families can’t afford to buy homes or cars. So businesses are forced to make layoffs. Our economy suffers even more, and credit dries up even further.

Responding to the meltdown in the financial marketplace, financial institutions are reeling in credit lines and requiring borrowers to meet stringent credit standards.  Consumers also face higher prices, fewer choices and less competition as banks continue to consolidate.

Now, more than ever, Americans need continued access to small-denomination, short-term credit. 

Despite the turmoil, the payday lending industry continues to assume all fiscal risk and provide access to credit to millions of middle-income consumers. The rates and requirements remain the same. Payday lenders require no collateral on the small-denomination loans and do not report to credit agencies, yet customers continue to meet their obligations and repay when due. The payday lending industry remains sustainable and operational, except in states where annual interest rate caps preclude viability.    

In some cases, banks’ former darlings — consumers who paid consistently and on time but let their balances ride — now are being hit hardest, asked to stomach higher interest rates and fees or try their luck with different card issuers.