For low-income people, that experience isn’t just annoying. It can also be a real financial hardship. Mismatches between available funds and expenses can create a spiral of bank overdraft fees and denied transactions, and the deeper in someone gets, the more insurmountable it can feel.

“It’s very embarrassing,” a commenter told TalkPoverty, describing a day of being hit with three separate overdraft fees while waiting on  processing for a paycheck.

That’s something that could change as early as 2024 with a proposed real-time payments system recently announced by the Federal Reserve, America’s central bank. With FedNow, as it’s being called, funds could be moved any day, any time, nearly instantly.

The move is long overdue and has big implications for people who cannot afford to wait for a transaction to clear, such as the 1.8 million people earning minimum wage or less. A waiter making a tipped minimum wage, for example, can ill afford to deposit a paycheck and wait for it to clear with their rent deadline looming, and the technology already exists to fix the problem.

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Real-time payments are used all over the world to move funds rapidly; they are a type of “faster payments,” which speed the payment process relative to the current standard, but they aren’t just faster. They are, as the name implies, virtually instant.

The United States, though, has remained stuck in the past with an outdated payments system created decades ago that doesn’t operate every day or at all times throughout the day.

In places such as Mexico, the U.K., Japan, Australia, and Turkey, both private firms and central banks own and operate faster payment systems — and in the U.S., a consortium of banks known as the Clearing House operates its own, called, creatively, RTP (for Real-Time Payments). RTP has been rolling out since 2017, and is open to all federally-insured financial institutions. The Clearing House claims RTP is active on 50 percent of direct deposit accounts in America, but the service’s initial customers were the same larger banks that make up the Clearing House.

These account for a large volume of American bank accounts, but a smaller segment of American banks; good for Chase, but perhaps not good for clients, especially since RTP controls pricing and access, potentially to the detriment of some users.

The Fed, building on the work of a task force formed to explore faster payments, wants to leverage its already extensive network of connections with banks, credit unions, and other financial institutions large and small. The goal is not to replace RTP, but to offer another option, and specifically a public one, which offers a net good and adheres to the government’s critical role in promoting fair access, pricing, and opportunity for all.

This is important because while the Clearing House has promised to hold rates steady, there’s no guarantee it will. Smaller banks are concerned about being cut out by what former Independent Community Bankers of America president and CEO Cam Fine described as a “monopoly.” Clearing House’s target date of 2020 for covering all direct deposit accounts in the U.S. is also likely unrealistic, while the Fed’s existing network and reach could make near-universal access much more logistically possible.

Fine notes that the Federal Reserve has been involved in payment processing for over 100 years; this is just another iteration of the central bank’s duties, a sentiment echoed by Chairman Jerome Powell.

Real-time settlement has big implications for businesses, especially small ones. But for low-income people, it could be transformative. Americans spend $24 billion in overdraft fees annually, some of which are driven by issues resolvable via faster payments; if there’s no lag between deposit and funds availability, there’s less likelihood of engaging in a transaction that will overdraw an account. If someone expects to get paid on Friday, the funds are instantly available, and they can pay their rent without worrying about a financial penalty.

People also spend about $7 billion on payday loans, which one in ten Americans have used. Real-time payments can’t wipe out the payday loan industry, but they can take a chunk out of it, since some of those loans are taken out in desperation by people who need money immediately, not after the time it takes for a bank to settle. Similarly, Americans spend approximately $2 billion cashing checks every year. That’s not just people who don’t have bank accounts; it includes people who can’t afford to wait for their accounts to clear.

That’s billions of dollars low-income people can ill-afford going into the pockets of companies with entire families of products built upon exploiting financial vulnerabilities.

Thomas Hoenig, former president of the Federal Reserve in Kansas City, former vice-Chair of the Federal Deposit Insurance Corporation, and currently a senior fellow at the Mercatus Center, notes that FedNow has another potential benefit as the system is built out: It could extend to other financial institutions such as remittance services. Immigrants sending money home through Western Union could therefore benefit from modernization to U.S. payments system, as a faster payments service in the United States can communicate with similar systems overseas, instantly transferring funds from senders to recipients.

Real-time payments will not fix issues like a federal minimum wage that hasn’t increased since 2009, repeated attacks on nutrition programs, and attempts at undermining unions. But they will help low-income people get, and move, their money faster, reducing the strain that comes from living paycheck to paycheck but not actually knowing when the funds in your paycheck will be accessible.

I had just started a new job. My household went from two incomes to just one, and we were definitely starting to feel it. The mortgage was due, all of the regular household bills and responsibilities were still there, and my son still needed money to cover school and sports expenses.

I managed to use the remainder of my savings to pay everything, but I was still $500 short for my mortgage payment. I was stressed out, trying my best to make ends meet and keep some normalcy in my son’s life. I knew I had a paycheck coming, but it would not arrive in time to avoid all of the late fees and the credit hit for being 30 days late on my mortgage.

I reached out to my bank to see if I could get a small loan and was denied due to not having a high enough credit score. I had one credit card with a very small limit, but it was pretty much maxed out, so I couldn’t take out a cash advance.

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I also didn’t want to borrow money from my friends and family because that would be admitting all was not well in my household. Also, I had no desire to answer the many questions that would come if I asked to borrow that much money.

While driving my mom to one of her doctor’s appointments, I saw a large green sign that seemed to be the answer to my problems: Fast cash now, no credit checks, walk out with up to $500 today.

It seemed worth exploring so I went in and asked what was needed. I was told all I needed was an active checking account, a copy of my bank statement, and proof of employment. I could get all those things with no problems.

After retrieving the necessary items, I went back, filled out the application, signed on the dotted line, and walked out of the door with $500 cash in my hand about 30 minutes later.

I felt as though my problems had been solved. I had the amount necessary to finish covering that month’s necessary expenses. I had a paycheck coming and I would be able to cover the payment on the loan. Crisis over, right?

That feeling lasted all of two weeks. I quickly realized that although I had a paycheck coming, my household’s financial situation was the same. We were still solely depending on my income, and the amount of our bills covering essentials hadn’t changed. So not only did I still have to continue paying for those things, now I had a loan payment to cover as well.

I had actually added to the expense pile.

Recently, the Consumer Financial Protection Bureau — which is supposed to be the nation’s consumer watchdog — proposed removing a rule that would require lenders of payday, car title, and other high-cost installment loans to verify the borrower’s ability to pay back the loan. This is something every other lending institution does, engaging in credit checks, verifying income, and assessing if the borrower can actually pay. My experience, and those of others I’ve spoken with, shows why such a rule is so key.

When my paycheck hit the bank, the payday loan people were right there to take their cut. I managed what was left of my check and paid my bills. I needed to get this loan paid as soon as possible.

In order to pay the loan back quickly and not fall behind any of my regular expenses, I picked up a temporary second job. This meant less time at home being an engaged parent to my son, and I constantly felt tired and drained. I feel as though I missed a chunk of my and my son’s life working seven days a week and only being at home to sleep.

Granted, I could have gotten a second loan or rolled the first loan over, meaning paying an additional fee to delay paying back the original loan. I did not consider this option because it would not solve the problem. If the first loan was causing a strain on my finances, I definitely didn’t need to add to the debt. I just wanted to be done with it as quickly as possible.

Fortunately, I paid back my loan before the due date to avoid the additional interest and fees. I avoided the devastation that many others have experienced as the result of taking out these loans.

In the 2018 election, Colorado passed Proposition 111, which put a 36 percent cap on the amount of interest and fees that payday lenders can charge borrowers. While working on the campaign for Proposition 111, I talked with others who had taken out multiple payday loans to assist with covering living expenses. In 2016, Colorado payday loan customers paid an average interest rate of 129 percent, costing them $119 in interest and fees. Nationally, more than 75 percent of payday loan fees come from borrowers who use 10 or more loans per year.

Doing the math, I discovered that I paid approximately 118 percent on that $500 loan. Had I realized that the interest and fees added to this amount, I would not have taken out this loan. I would have tried to negotiate and make payment arrangements, especially because my situation was temporary.

Most of the people I spoke with during the campaign were not able to pay their loans back and the results were devastating: Closed bank accounts because payday lenders continue to run checks through the account many times, resulting in ridiculous overdraft fees. Embarrassing collection calls to places of employment and family. Damage to credit scores. Garnishment of wages. The end result for many was filing for bankruptcy in order to stop the bleeding.

Many may think that payday lenders are offering assistance to those who cannot obtain financial assistance through traditional means such as bank loans, credit card cash advances, asking employers for pay advances, or loans from friends and family. In reality, these loans are predatory in nature. Payday lenders work to exploit hard-working people at their most vulnerable moments.

The CFPB’s provisions were established to protect borrowers from the harmful practices of payday lenders. Many people are living paycheck to paycheck, not because they can’t manage their money properly or are living an extravagant lifestyle, but because they simply had a temporary setback or an unplanned emergency. Seeking out a loan or financial assistance to get a moment of relief should not end in financial disaster.

Under the Obama administration, the Consumer Financial Protection Bureau attempted to rein in abusive payday lending, by, among other measures, forcing lenders to ensure borrowers had the means to pay back their loans. The Trump administration, under interim CFPB Director Mick Mulvaney, is looking to roll back those rules and give payday lenders, who as an industry donated significant amounts of money to Mulvaney when he was a congressman, more room to operate. A high-profile rule proffered by the CFPB to govern payday loans is under review, and Mulvaney’s CFPB has also dropped cases the bureau had previously pursued against payday lenders.

Payday lenders have taken notice, and are already adapting their business to evade regulation. Meanwhile, small-dollar, high-interest lending has migrated to other parts of the financial industry, including traditional banks. Banks aren’t actually calling their loans “payday loans” — preferring names like “Simple Loan” — but the problems, including high costs and the potential for creating a debilitating cycle of debt, are largely the same.

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Payday loans are short-term loans, so named because they are meant to be paid back when the borrower earns her next paycheck. The interest rates on these loans are high, running up to 400 percent or more. (For comparison’s sake, a borrower will pay about 5 percent interest on a prime mortgage today, and between 15 and 20 percent on a credit card.) Payday lenders tend to cluster in areas where residents are disproportionately low-income or people of color, preying on economic insecurity and those for whom traditional lending and banking services are unavailable or insufficient.

It’s not only those high interest rates that make the loans lucrative for lenders and damaging for borrowers. Much of the income payday lenders derive comes from repeat business from a small population of borrowers who take out loan after loan after loan, engaging in so-called “churn.” According to the CFPB, more than 75 percent of loan fees come from borrowers who use 10 or more loans per year. These borrowers wrack up big fees that outweigh the economic benefit provided by the loans and become stuck in a cycle of debt.

This is serious money we’re talking about: Prior to the Obama administration’s attempt to more strongly regulate the industry, payday lenders  made some $9.2 billion annually. That total is down to about $5 billion today, even before the Obama team’s rules have fully gone into effect. Meanwhile, many states have also taken positive steps in recent years to regulate payday lending. (The loans are also outright banned in some states.)

However, that doesn’t mean payday lending is going out of style.

For starters, old payday lenders have revamped their products, offering loans that are paid in installments — unlike old payday loans that are paid back all at once — but that still carry high interest rates. Revenue from that sort of lending increased by more than $2 billion between 2012 and 2016. The CFPB’s rules don’t cover installment-based loans.

“They claim that these loans are different, are safer, are more affordable, but the reality is they carry all the same markers of predatory loans,” said Diane Standaert, director of state policy at the Center for Responsible Lending. These markers include their high cost, the ability of lenders to access borrowers’ bank accounts, and that they are structured to keep borrowers in a cycle of debt. “We see all of those similar characteristics that have plagued payday loans,” Standaert said.

Meanwhile, big banks are beginning to experiment with small-dollar, short-term loans. U.S. Bank is the first to roll out a payday loan-like product for its customers, lending them up to $1,000 short-term, with interest rates that climb to 70 percent and higher. (Think $12 to $15 in charges per $100 borrowed.)

Previously, American’s big financial institutions were very much discouraged from getting into small-dollar, high-interest lending. When several major American banks, including Wells Fargo and Fifth Third, rolled out short-term lending products prior to 2013, they were stopped by the Office of the Comptroller of the Currency, which regulates national banks. “[These] products share a number of characteristics with traditional payday loans, including high fees, short repayment periods, and inadequate attention to the ability to repay.  As such, these products can trap customers in a cycle of high-cost debt that they are unable to repay,” said the OCC at the time.

In October 2017, however, the OCC — now under the auspices of the Trump administration — reversed that ruling. In May 2018, it then actively encouraged national banks to get into the short-term lending business, arguing that it made more sense for banks to compete with other small-dollar lenders.  “I personally believe that banks can provide that in a safer, sound, more economically efficient manner,” said the head of the OCC.

However, in a letter to many of Washington’s financial regulators, a coalition of consumer and civil rights groups warned against this change, arguing that “Bank payday loans are high-cost debt traps, just like payday loans from non-banks.” Though the terms of these loans are certainly better than those at a traditional payday lender, that doesn’t make them safe and fair alternatives.

Per a recent poll, more than half of millennials have considered using a payday loan, while 13 percent have actually used one. That number makes sense in a world in which fees at traditional banks are rising and more and more workers are being pushed into the so-called “gig economy” or other alternative labor arrangements that don’t pay on a bi-weekly schedule. A quick infusion of cash to pay a bill or deal with an unexpected expense can be appealing, even with all the downsides payday loans bring.

Payday lenders seem well aware of the state of regulatory flux in which they find themselves; they have made more than $2 million in political donations ahead of the 2018 midterm elections, the most they’ve made in a non-presidential year, according to the Center for Responsive Politics.

That’s real money, but it’s nowhere near as much as borrowers stand to lose if payday lending continues to occur in the same old way. In fact, a 2016 study found that consumers in states without payday lending save $2.2 billion in fees annually. That’s 2.2 billion reasons to ensure that small-dollar lenders, big and small, aren’t able to go back to business as usual.

For seven straight years the United States’ economy has been in an expansion—one of the longest on record. Even better, data released earlier this month by the Census Bureau showed that middle class and low-income Americans have finally started to benefit.

Still, a huge number of Americans live paycheck to paycheck. Almost half of all Americans—a full 46%—say they would not be able to come up with $400 in the event of an emergency. Unfortunately, many will turn to payday loans to make ends meet.

What are payday loans?

Payday loans are advertised as quick and easy loans that borrowers can repay when their next paycheck comes around. There’s a catch, though. The interest rates are so high—often 400% and above, compared to about 16% on the average credit card—that borrowers simply cannot afford to pay back the loan and cover basic expenses at the same time. Instead, the vast majority of loans—80%—are rolled over or followed by an additional loan within just two weeks. The result is that borrowers wind up in debt—the median borrower for more than six months in a given year.

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Why do borrowers use them?

It’s fairly common knowledge that payday loans are a trap. So why do borrowers—let alone 12 million annually—even bother?

First of all, most payday loan borrowers—who are disproportionately people of color—have low or moderate incomes and struggle to obtain credit from mainstream sources like a credit card company or banks mostly because they have low credit scores. As a result, payday loans often appear to be the most accessible option.

Most of these borrowers take out payday loans cover everyday expenses (it’s a common misperception that payday loans are used as stop-gaps for unexpected financial setbacks). Since the cost of basic necessities, like rent and child care, has surged in recent years—at the same time that wages have stagnated—many low-income Americans have been left without an adequate and reliable cash flow.

How bad are they?

All told, the median borrower will pay $458 in fees on a typical $350 two-week payday loan. Many borrowers, however, will pay an even steeper price. Small payday loans often balloon into thousands of dollars in debt, and the effects of default are severe. If loans aren’t repaid quickly enough, payday lenders have the right to seize borrowers’ bank accounts to make sure that they are prioritized for payment above all other bills—no matter how urgent or essential. Borrowers can also end up saddled with insufficient fund fees from banks when lenders try to draw too much money from borrowers’ accounts. Even worse, an indebted borrower is more likely to have her bank account closed against her will, which pushes many consumers further out of the financial mainstream and forces them to use expensive alternative financial services—like check cashers and pawn shops—that carry higher fees and risk.

These problems affect entire families. Low-income families with access to payday loans are also more likely to struggle with bills like the mortgage, rent, and utilities. This can lead to foreclosure or eviction, which can devastate families in the short- and long-term. Payday loans are also linked with delinquency on child support payments, which deprives families of needed income and carries severe consequences for the parent unable to make payments, from a suspended drivers’ license to incarceration.

On some level, the entire nation is paying for this practice. Each year, payday loans drain more than $4 billion in interest and fees from the economy—and that’s just the direct cost.  It doesn’t include the costs associated with homelessness (like emergency shelter) for families who lose their homes, or increased enrollment in public assistance programs to cope with the debt trap.

How can we protect borrowers?

State-level efforts to cap interest rates and fees to 36% or below—as 14 states and the District of Columbia have done—are key. But attempts to regulate predatory lenders otherwise have, by and large, proven to be exercises in futility. For example, after 64% of Ohio voters elected to ban the practice in 2008, loan sharks obtained licenses as mortgage lenders and continued to peddle payday loans under that guise. Predatory lenders in Texas acted similarly. In states where payday loans have been banned altogether, lenders have lured borrowers through online channels that can operate nationwide.

This “legislative Whack-a-Mole” at the state level has made it clear that the country needs federal reform to effectively protect borrowers.

Fortunately, the Consumer Financial Protection Bureau proposed new rules in June that target some of the most egregious practices in the industry. Under the new rules, loan sharks will have to determine whether prospective borrowers are actually able to repay a loan before they take one out (in most cases). The rules will also prohibit the repeated loans that trap borrowers in debt: Lenders will not be permitted to directly roll over loans or loan to those who seek to re-borrow within 30 days, unless those borrowers can prove that they will be in a better position financially. It will also place important limitations on lenders’ ability to seize borrowers’ bank accounts.

But here’s another idea: Eliminate the need altogether. If borrowers use payday loans to address chronic shortfalls, then economic insecurity has to be addressed as well through wage hikes and improvements to public assistance programs. These can go a long way to protect against cash shortages that lead families to take out loans with such insidious costs.

Today, the Consumer Financial Protection Bureau  (CFPB) released new regulations to help take these harmful financial products off the shelf. This rule is expected to help struggling families avoid $8 billion in fees from predatory lenders each year. And yet, it faces an uphill battle—the CFPB will need not only public support for its rule to come to fruition, but also for Congress not to sabotage its efforts and for state legislatures to help push it to the finish line.

These reforms are sorely needed, as payday and title lending turn a profit on the backs of cash-strapped families. In exchange for access to someone’s bank account or a spare set of keys to their car, these lenders typically offer quick cash—anywhere from a few hundred dollars to a few thousand—expecting it to be paid back either from the next paycheck or within the next month.

But, many borrowers can’t afford to pay back the loan at the next payday or the end of the month. Instead, 4 out of 5 borrowers have to roll over that loan, or take out another one to pay back the first. The result is that interest and fees pile up, and borrowers are unable to pay down the initial loan even. This can lead to enormous economic hardship. As St. Louis resident Naya Burks found after borrowing $1,000, her loan became a $40,000 debt through interest, fees, and a lawsuit. And as the CFPB’s own research has shown, 1 in 5 car title borrowers lose the car to repossession.

It’s no wonder, then, that faith leaders from all different traditions have spoken out against these loans. The states have taken action as well. As many as 14 states and the District of Columbia have instituted interest rate caps of 36 percent or less to ban these loans. Indeed, in Arkansas, where the state Constitution now puts a ceiling on interest rates, only 12 percent of former borrowers said that they were worse off as a result.

Unfortunately, many members of Congress seem to have missed the memo that these are toxic products that do more harm than good. Florida’s Congressional delegation, among others, has tried to block the CFPB, arguing that the state already has the problem under control—even as lenders take $76 million a year out of the state’s economy. And just last year, Congress tried to weaken tough anti-predatory lending rules that protect service members and also considered hampering the CFPB’s ability to act independently.

The CFPB’s rule will rein in some of the worst practices in this industry. In many circumstances, it will require lenders to figure out whether the borrower is actually able to pay back a loan before making one in the first place. It will limit how many loans borrowers can take out, and when. And it will limit lenders’ ability to pickpocket by seizing funds from borrowers’ bank account over and over without consent.

These strong federal rules are also important because many states haven’t been able to address this problem on their own. Missouri has almost as many payday loan stores as grocery stores, with an an average interest rate on these loans of 444 percent. And in 2014, the Louisiana legislature couldn’t even pass a weak bill limiting payday loans to ten per year. That’s not to mention Ohio, where voters overwhelmingly supported a payday lending ban, but lenders rechartered themselves as mortgage companies through a legal loophole. But states still can take action to curb this abusive practice. They can follow the lead of New York, North Carolina, and others states by capping interest rates, an action of extra importance given that a loophole in Dodd-Frank blocks the CFPB from taking this action. And even states with strong laws on the books need to stand firm when tempted to adopt a looser standard.

Stopping the debt trap won’t happen in a day. But today, the CFPB takes a big step toward taking a toxic product off the shelves. Congress, and the nation, should take notice.

In 2008, Ohio passed the Short Term Loan Act, which established a number of protections against predatory payday lending and other small dollar loans, including setting a 28 percent rate cap on payday loans.

Not surprisingly, the Ohio payday industry immediately tried to overturn the law through a ballot initiative. So what did Ohioans decide? They voted overwhelmingly (64 percent) to affirm the Short Term Loan Act, including the 28 percent rate cap. (Fun fact: the Ohio payday industry spent $16 million on the ballot initiative effort, while opponents spent just $265,000).

For the past seven years, however, payday lenders have deliberately defied the will of Ohio voters by continuing to saddle consumers with triple-digit interest rates on loans—some as high as 763 percent. They do this by using two older Ohio laws—the Mortgage Lending Act and Small Loan Act—to take out different lending licenses that allow them to circumvent the protections put in place by the Short Term Loan Act.

There are now 836 payday and auto title lenders in Ohio—more than the number of McDonald’s in the state. These lenders are so good at bypassing state laws that every year they rake in $502 million in loan fees alone. That’s more than twice the amount they earned in 2005, three years before the 28 percent rate cap was set.

Unfortunately, payday lenders scheming to avoid state consumer protection laws isn’t just a problem in Ohio—it’s a problem throughout the country. Time and again, whenever states crack down on abusive, small dollar lending, payday lenders find creative ways to continue business as usual:

• In Texas, payday lenders are dodging state laws by posing as Credit Access Businesses (a tactic also employed by Ohio payday lenders). By disguising themselves as a completely different kind of financial service provider—one that isn’t subject to the limits imposed on payday lenders—they are able to essentially continue to act like payday lenders.

• In states where payday lending is prohibited—such as Arizona, Georgia, Maryland, and others—lenders utilize online lending to broker deals with consumers within those same states.

• In many other states with payday loans restrictions, lenders have established partnerships with Native American reservations to circumvent the law.

The moral of the story is clear: even if every state had protections on the books, lenders would find new ways to get around them.

But the good news is that the Consumer Financial Protection Bureau (CFPB) can help to crack down on these abuses.

Earlier this spring, the CFPB released a proposed framework for regulations that would govern the small dollar lending industry. As currently written, however, it would leave a number of glaring loopholes that are ripe for exploitation by payday lenders.

For starters, the proposal doesn’t address the problem of unscrupulous online lenders. It also fails to address the main cause of payday debt traps: the fact that lenders aren’t required to determine a borrower’s ability to repay a loan, even as they continue to peddle more and more loans to “help” a consumer dig out of a hole.

The CFPB can’t eliminate all the circumvention and abuses by payday lenders, but it can help. To do that, it needs to issue the strongest rules possible—and soon. It’s been eight months since the release of the regulatory framework and the CFPB has yet to offer an official proposal. Low-income Americans across the country need the CFPB to act fast.

That’s why we at CFED launched the Consumers Can’t Wait Campaign—to call on the CFPB to release strong rules on payday lending now. Until the CFPB acts, the profitable practice of ensnaring millions of American consumers in debt traps will continue to thrive unabated.

In what seems a reprisal of the predatory practices that led up to the subprime mortgage crisis, low-income individuals are being sold auto loans at twice the actual value of the car, with interest rates as high as 29 percent. They can end up with monthly payments of $500—more than most of the borrowers spend on food in a month, and certainly more than most can realistically afford. Many dealers appear in essence to be setting up low-income borrowers to fail.

Dealers are also making use of a new collection tool called a “starter-interrupter device” that allows them not only to track a borrower’s movements through GPS, but to shut off a car with the tap of a smartphone—which many dealers do even just one or two days after a borrower misses a payment. One Nevada woman describes the terrifying experience of having her car shut off while driving on the freeway. And repossession of their cars is far from the end of the line for many borrowers; they can be chased for months and even years afterward to pay down the remainder of the loan.

Predatory subprime auto loans are just the latest in a long line of policies and practices that make it expensive to be poor—something I saw every day representing low-income clients as a legal aid attorney.

Low-income individuals are much more likely to be hit by bank fees, such as monthly maintenance fees if their checking account falls below a required minimum balance—balances as high as $1,500 at leading banks such as Bank of America and Wells Fargo—not to mention steep overdraft fees. For the more than 10 million U.S. households who lack a bank account, check cashers charge fees as high as 5 percent. This may not sound like much, but consider a low-income worker who takes home around $1,500 per month: She’d pay $75 just to cash her paychecks. Add in the cost of money orders—which she’ll need to pay her rent and other bills—and we’re talking about $1,000 per year just for financial services.

Whether or not they have a bank account, very few low-income families have emergency savings, and more than two-thirds report that they’d be unable to come up with $2,000 in 30 days in the event of an emergency expense such as a broken water heater or unexpected medical bill. Out of options, many turn to payday loans for needed cash. Jon Oliver, host of Last Week Tonight, gave this important issue perhaps the best treatment I’ve seen in some time, detailing how families who turn to predatory payday loans can end up trapped in an inescapable cycle of debt at 400 percent annual interest.

Then there’s the rent-to-own industry.  Through weekly installments, low-income families with bad credit or no credit can end up paying as much as two and a half times the actual cost of household basics like a washer and dryer set, or a laptop for their teen to do his homework.

Grocery shopping can bring added costs too. For families who can’t afford to buy in bulk, the savings Costco offers are out of reach. And for those without a car, living in low-income neighborhoods without a convenient supermarket, it’s either cab or bus fare to haul groceries back, or swallowing the markup at the neighborhood corner store.

And then there’s the issue of time. Something I heard about frequently from my clients when I was in legal aid was how much extra time everything takes when you’re poor. Many told of taking three buses to work and back, and spending as many as five hours in transit to get to and from their jobs every day. Those who needed to turn to public assistance to make ends meet would describe waiting at the welfare office all day long simply to report a change in their income.

Also worth noting is the criminalization of poverty and the high costs that result. In a nationwide trend documented by the National Law Center on Homelessness and Poverty, a growing number of states and cities have laws on the books that may seem neutral—prohibiting activities such as sidewalk-sitting, public urination, and “aggressive panhandling”—but which really target the homeless. (The classic Anatole France quote comes to mind: “The law in its majestic equality forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”)

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Arresting a homeless person for public urination when there are no public bathroom facilities is not only a poor use of law enforcement resources, it also sets in motion a vicious cycle: The arrested individual will be unable to afford bail, as well as any fees levied as punishment, and nonpayment of those fees may then land him back in jail.

In an extreme example, in the state of Arkansas, missing a rent payment is a criminal offense. If a tenant is even one day late with the rent, his landlord can legally evict him—and if the tenant isn’t out in 10 days, he can wind up in jail.

In yet another penny-wise and pound-foolish trend, states and localities are increasingly relying on enforcement of traffic violations—as well as fines and fees levied on individuals involved with the criminal justice system—as sources of revenue. In Ferguson, Missouri, the city relied on rising municipal court fines to make up a whopping 20 percent of its $12.75 million budget in 2013. Ability to pay is often ignored when it comes to these types of fines and fees, leaving individuals stuck in a cycle of debt long after they’ve paid their debt to society. While debtor’s prison was long ago declared unconstitutional, failure to pay can be a path back to jail in many states.

It’s good to see the New York Times, Melissa Harris-Perry, and others paying attention to these injustices. But that’s just the first step. If we are truly interested in building an America that is defined by opportunity, we must commit to enacting public policies that support rather than impede upward mobility.

Editor’s Note: To watch both segments of the Melissa Harris-Perry show that featured Rebecca as part of a panel discussing the high cost of being poor click here and here.

For much of Christian history, the Catholic Church opposed charging any interest for loans, which was regarded as sinful “usury.” In late antiquity, St. Augustine described loans as one form of charity: he assumed that the lender would charge no interest, providing a service to the needy borrower at some cost to themselves. He realized that many of those who need loans in order to get by are poor people whose needs should be at the forefront of Christian concern. Out of this same realization, some Italian Franciscans began to open pawnshops, called montes pietatis, in the 15^th century, running them as charitable organizations to help poor people access small loans. As it became clear that these local practices were helping people in need, official Church teaching changed. In 1515, Pope Leo X proclaimed that charging “moderate” amounts of interest so that loan organizations could be maintained was legitimate under church law. (Despite this acknowledgement that lending at interest could be done morally, deep-rooted stigma against Jewish moneylenders, who had historically responded to Christians’ need for loans, affects European and US culture even today.)

If you hear a Christian call out “usury” today, like theologian Alex Mikulich does here, likely they’re not decrying all charging of interest but suggesting that a certain type of loan is predatory, unjust and harmful to the borrower. Catholic groups use this tradition effectively as they fight some of the most exploitative practices of payday lenders in states like Illinois, Kentucky, and Minnesota.

A new film, Spent: Looking for Change continues the dialogue about the payday loan industry. Two things are clear from this powerful film. First, many current practices of the payday loan industry are indeed exploitative and harmful to families who already find themselves on the edge. One family in the film estimates that by the time they pay off a loan of $450, they will have paid more than $1700 in interest. Another borrower was not allowed to pay off her loan until she could pay in full—racking up more interest although she could have been making payments, and eventually losing the car that she needed for work. Second, while payday lenders and check-cashing services charge fees that could accurately be described as usurious, they fill an otherwise unmet need. As many as 70 million people in the U.S. are excluded from the traditional banking system, because of issues like bad credit, no credit (a potential result of the cautious choice to avoid credit card use), or lack of geographic access to traditional banks.

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The film is sponsored by American Express, which is announcing new financial products designed to help those underserved by the traditional financial system, like the people featured in Spent who turn to usurious lenders. This seems consistent with a trend noted in the New York Times earlier this year: in response to rising inequality within the U.S., companies are shifting their offerings to appeal to either very wealthy, or increasingly poor consumers. It’s encouraging, I suppose, that one result of this trend could be more affordable financial services for people who historically have needed them. But let’s not forget that high inequality comes with a host of other social ills.

Let’s also not assume that because the market is beginning to respond to this need, anti-poverty activists can just sit back and relax. The makers of Spent created a petition to legalize prize-linked savings accounts.  Supporting Elizabeth Warren’s plan to allow Post Offices to offer affordable financial services seems like another promising response. Watching and sharing Spent is a great way to keep the conversation going.

And I’d encourage people of faith, and everyone concerned about poverty, not to stop there. Microcredit agencies like Grameen America and Kiva Zip help individuals and groups—maybe even you, or your congregation—make interest-free loans to small-business owners in the US and abroad. Run on donations, they boast impressive repayment rates and help people in need avoid the most predatory operators in the financial system.

Call them today’s Franciscan pawnshops.