Payday lenders make money by giving people loans they cant pay back.

That fact has been apparent for years. A 2009 study from the Center for Responsible Lending found that people taking out new loans to repay old ones make up 76 percent of the payday market. Despite this information, the payday loan industry has consistently argued in public that its high-cost loans with interest rates ranging from 391 to 521 percent do not trap borrowers in a cycle of debt.

In private, it's a different story. According a newly released email , the payday lending industry knows that most people cannot pay back their loans. In practice, consumers mostly either roll over or default; very few actually repay their loans in cash on the due date, wrote Hilary Miller, a key figure in the industrys fight against regulation, in an email to Arkansas Tech Professor Marc Fusaro.