"Please borrow only what you feel comfortable paying back when it's due," says Darrin Andersen, president of the Community Financial Services

Association. A new emblem will tell borrowers which lenders meet his trade group's requirements, Andersen says in the ad.

The $10 million campaign, announced last month along with some industry policy changes, came as states from Virginia to New Mexico consider

legislation to limit payday lending practices. But it's not stopping consumer watchdogs and people already in debt from questioning the motives of an industry whose loans' annual interest rates can exceed 400 percent.

"Payday lenders make it easy for consumers to get trapped in predatory debt," said Teresa Arnold, legislative director for AARP in South Carolina .

Payday lenders offer quick cash advances for a fee secured by a postdated personal check from the borrower. Customers are supposed to repay the loan once they receive their next paycheck. Borrowers who can't pay often "roll over" the loan repeatedly, leading to more charges that can quickly add up and lead to a cycle of debt. Customers are drawn to the lenders because, unlike banks and credit unions, they don't run credit checks.

Rena McFadden and her husband are two people who've become trapped. Her husband has been dealing with lenders threatening court action unless the McFaddens quickly repay the $2,400 they owe.

"The time to repay is too short. He's been trying to talk to them, but they won't talk," said McFadden, a 39-year-old who works in a dry cleaning shop. "They want the money by the next pay day. How are you supposed to pay your bills?"

There are more than 22,000 payday advance locations in the United States that garner $6 billion annually in revenues, according to Steven Schlein,

a spokesman for the financial services association, which represents about two-thirds of payday lending companies.

Source

http://abcnews.go.com