Payday Loans are not loans at an interest rate -- they "factor" a check: (Trade in the buying and selling of personal property (your bank draft [check]).

Simpler example: A pawnshop of checks.

Pawnshops are regulated. However, subject to individual state laws (in the USA) an individual can buy property and sell it ;)

Quote:

A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate. The party that originally buys the securities effectively acts as a lender. The original seller is effectively acting as a borrower, using their security as collateral for a secured cash loan at a fixed rate of interest. A repo is equivalent to a spot sale combined with a forward contract. The spot sale results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is effectively the interest on the loan, while the settlement date of the forward contract is the maturity date of the loan. http://en.wikipedia.org/wiki/Repurchase_agreement

This is a $5 trillion market (*At the end of 2004, the US repo market reached US$5 trillion)-- same idea really but legitimized by SEC regulations and license -- securities are personal property. (In essence; the same as your auto or diamond ring.)

The 1% don't play for nickels and dimes ...