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The payday lending industry now represents an astounding $30 billion annually. People who are denied loans by mainstream banks take out these short term loans for expenses like medical bills, utility bills, holiday presents.

Most loans are no more than $500 each and more than 19 million households in this country have used them.

During the past ten years, the subprime industry exploded. It now includes everything from Wall Street banks to stores in strip malls. Subprime mortgages, rent-to-own shops, short-term loans against car titles, rapid-refund tax preparation, personal finance companies, and payday lenders are all part of this world.

Each product is interdependent so one expensive loan feeds into another, leaving borrowers to deal with multiple expensive finance charges and fees.

There are estimated to be at least 22,300 payday lending facilities in the U.S. The industry more than doubled in size between 2000 and 2004, thanks to Wall Street money and deregulation.

Advance America is the largest U.S. payday lender, last year issuing nearly $4 billion in loans that averaged under $400. Relaxed state lending laws due to deregulation enable payday lenders to obtain exemptions from state rate caps. Lenders like Advance America have Wall Street connections that allow them to dominate the market.

In 2010, over $1.5 billion in credit was offered to publicly traded payday lenders by banks. Wells Fargo is reportedly the largest financier, backing

five of the six largest firms. It is also one of at least three U.S. banks that considered a checking account product that operates similarly to payday loans.

Lawmakers caught wind of the industry growth and heavily scrutinized these lenders during the past ten years. Interest rate caps for cash advances were passed by at least 17 states and in 2006, payday loans were outlawed for active-duty service members.

However, the industry is taking steps to adapt to changing regulations, enabling payday firms to prosper.