However, for certain people who have a short-term need that only cash will satisfy, it makes considerable sense. For example, if the rent is due two weeks before payday, the fee for a supplemental loan may be considerably less than the fee for a late rent payment. It's cheaper than having to have the power or water turned back on after being disconnected. It saves a borrower the embarrassment of having to mooch a loan off family or friends. Typical dangers in these loans are in rollover fees, which in some states are so high that borrowers are never able to repay the principal.
Some states forbid rollovers.
However, as with any regulatory measure, this one seeks to protect the industry from as much competition as possible. It levies substantial fees on potential licensees as well as carrying significant bonding requirements. There are criminal provisions for persons convicted of engaging in this business without the license. Even in a robust economy, there is a need for consumers to get small amounts of cash with as little pain as possible. Many of us have been there.