You've probably seen the commercials on TV and driven past the storefronts hundreds of times. Payday lenders seem to be everywhere.
Kathleen Day is with the non-partisan, nonprofit Center for Responsible Lending. She doesn't mince words when it comes to these high-interest loans.
"It's usury, commonly known as loan-sharking, and there's a reason that going back to biblical times this kind of exorbitant interest rate charges were banned in almost every major religion."
The Center for Responsible Lending takes the position that payday lenders should be banned or limited in the amount of interest they can charge to no more than 40 percent.
Twelve states have banned them, but Texas lawmakers take a more pragmatic view that short-term loans are necessary for some people who don't have good credit.
Houston Mayor Annise Parker says she's working on a draft ordinance to regulate these companies, but she's hopeful the state will enact regulations in the upcoming session.
"We're all trying to achieve the same thing, to rein in predatory lending practices. I believe that there's a need for payday lending. But what happens is once someone gets the first loan, they get persuaded to just roll the loans forward and the interest rates go up and they get trapped in a cycle."
Right now, there's no limit on the number of times someone can roll their loan over, which leaves some people paying in excess of 500 percent in interest and hundreds of dollars in fees on these supposedly small, quick loans.
Jim Hawkins is an assistant professor at the University of Houston Law Center and studies the payday lending industry. He says limiting the number of rollovers is only effective if you have a statewide database to track who is receiving the loans.
"Because otherwise, you can take a loan from one payday lender and roll it over three times and if the statute prevents that lender from lending to you again, you just go to the lender down the street and get a new loan to pay off your old loan. And so there has to be some sort of way to track and ensure that people aren't using proceeds from one loan to pay off the old loan."
Mayor Parker says payday loans should be based on a reasonable expectation that the borrower will be able to pay back the loan.
"Do you have to immediately pay it off or do they just put you on a payment plan, a monthly payment plan? How many months do you have to pay it off? We can put those kind of things into an ordinance. And how much can you borrow? What percentage of your income, or if you're borrowing against your vehicle title, what percentage of the value of your vehicle can you borrow?"
The cities of San Antonio, Austin and Dallas have all passed local ordinances to regulate lenders, but those cities have found themselves in litigation over the laws.