Payday loans. They’re either a quick cash solution when money's tight, or a business that preys on the poor.

For the past two days, Liz Crenshaw has been presenting investigative reports on this controversial industry. Today, she covered a news event that threatens to put the business out of business.

On September 18th, the D.C. City Council votes on capping the payday loan industry at a 24% annual percentage rate.

Since payday loan stores currently make as much as 500% interest on these loans, a cap would essentially put them out of business.

The bill is sponsored by councilmember Mary Cheh, and there was no mincing words on what she thinks about this industry.

Mary Cheh, D.C. Councilmember:
“The payday lenders have lived in this District, off the backs and out of the pockets of people of low income. They are predatory lenders.”

Mary Cheh has taken the lead in trying to force payday lenders to live with a 24% annual percentage rate cap. A cap, she says, the industry is fighting fiercely.

Cheh:
“They're spending hundreds of thousands of dollars on lobbyists and lawyers and ads, and putting money out into the community. They're swarming all over this District building because they want to sell us a fraud.”

We have been reporting on the payday lending industry for the past two nights. The industry tells us it provides short-term, quick loans for emergency situations, and says it's committed to promoting responsible use of its loans.

Tyrone Bland, D.C. Financial Services Association:
“It's just a short-term, sort of bridge over troubled water as it were, to help you through a financial crisis, help our customers avoid a cycle of debt, and help them make better financial decisions long term.”

But today, Mary Cheh brought three former payday loan employees who said they were in business to hook low-income wage earners into a cycle of debt. This is Mike Donovan. He resigned yesterday a Check 'n Go District Manager.

Mike Donovan, Former Payday Loan District Manager:
“The average Check 'n Go customer in Washington, D.C. is continuously in debt to the company for over a year. We train our sales staff to keep customers dependent. The repeat borrower is vital to our business model.”

Bill Harrod was a payday loan manager for 10 months and says he was trained to target a specific community.

Bill Harrod, Former Payday Loan Manager:
“My company was deliberately targeting minority people for a continuous loan process that they would never, ever get out of. “

And Cameron Blakely is a former payday loan store manager.

Cameron Blakely, Former Payday Loan Store Manager:
“Our borrowers were like indentured servants. They work, they work, but each payday we claimed a piece of their paycheck. Every paycheck.”

The Community Financial Services Association, the payday loan association, says today's allegations do not represent the experiences of millions of customers and employees in payday stores across the country.

It says customer satisfaction levels are higher than 80% .

And it says it wants to work with D.C. to ensure payday loans are offered in a safe and responsible manner.

Crenshaw:
Check 'n Go contacted us and said at the news conference today, three disgruntled former employees made false and reckless statements regarding its business practices. It said it provides a valuable credit option for customers, and that it will pursue all legal remedies available to the company.