The stars may be aligning against the short-term lenders that seem to be a fixture in every strip mall. The FDIC is working on new regulations to limit the interest the short-term lenders charge customers, reports USA Today.

The chaiman of the bank insurer, Sheila Bair, told the Consumer Federation of America that there is an astonishing gap between what the poor pay for credit and what the "fortunate" pay through regular banking channels. Nice that she noticed but this isn’t an accident. For better or worse, it was a deliberate choice.

In more heavily regulated times two or three decades ago, banks were forced to provide basic banking services at reasonable costs. Once those regulated services were no longer required by the regulations, they disappeared because they were a drag on profits and didn’t generate more profitable business. And into this vacuum stepped the payday lenders who now act as bankers to the poor.

A report issued Thursday shows why there are so many of them. Fees on their loans bring in $4.2 billion a year and 90 percent of their revenue is generated from fees to extend loans beyond the original term. To counter this the FDIC is working with banks serving military bases to create small-dollar loans that may have a savings component. The FDIC will also issue draft guidelines Monday giving banks credit toward meeting federal community lending requirements if they offer reasonably priced, small loans. Of course, when the business is so profitable, it’s hard to see why some banks haven’t seized the opportunity unless they don’t want to tarnish their images with high rollover fees. Of course, that hasn’t been an issue for their credit card arms.

And, as the Business Press reported, the Legislature is slowly moving to improve the situation. It set some limits in the last session and may tweak that legislation in the 2007 session. With the average consumer paying $793 for a $325 loan it’s about time to act.