The payday loan industry contributed hundreds of thousands of dollars to Tennessee lawmakers before the legislature passed flex loans.
But not every lawmaker took the money.
"If you ask me it's nothing more than legalized loan sharking," said Representative Darren Jernigan (D) Nashville.
Jernigan actually gave back the $1000 contribution he received from payday lenders. He came into office wanting to regulate the industry.
"Tell me why you need three in one strip mall?" Jernigan asked as he drove down Lebanon Road in his district.
He counted thirteen payday loan businesses on a short section of Lebanon Road in Donelson.
In Tennessee there are more than 1400 licensed pay day lenders.
That's more than the number of McDonalds, Wendy's and Waffle Houses combined.
"I'm very frustrated because it really drags down the community," Jernigan said.
In Davidson County payday loan business are highly concentrated in certain areas.
There are 14 in West Nashville along the Charlotte Pike corridor.
Drive through the Nolensville Road area in south Nashville and you will see 18.
But the highest concentration is along Gallatin Road with 23 locations from East Nashville to Madison.
State representative Cameron Sexton, (R) Crossville, sponsored the bill creating flex loans and said payday lenders provide a service to people who can't get traditional bank loans.
"In the end it's the consumer's decision on whether or not they want to take out this loan," Sexton said.
"Is it another option for consumers who need cash quickly, but can't go to a bank to get that? Yes." Sexton continued.
But minister, Russ King says his church near Lebanon Road often sees people caught in a cycle of debt.
"I think it's a disaster on families," King said.
He said is not one who normally supports regulating businesses and the free enterprise, but he believes the high interest rates payday loan businesses charge hurt the entire community.
"They get caught in a cycle from which there is no escape -- except bankruptcy and then that impacts every single one of us," King said.
In the state legislature, Representative Jernigan tried to cap all rates for pay day lenders at just 28 percent.
"My first bill was pretty much dead on arrival," Jernigan said.
Lawmakers not only rejected the rate cap, they actually approved flex loans, which legalized an annual percentage rate of 279 percent.
As first reported by NewsChannel 5 Investigates, in the months before and after that law passed, more than $400,000 in contributions to Tennessee Lawmakers was doled out by 5 pay day loan political action committees.
Karl Frisch is the Executive Director of Allied Progress, a Washington DC based non-profit that has tracked the political spending of pay day loan companies across the country.
"It happens every where that pay day lenders are allowed to do business," Frisch said.
"Payday lenders do one of a few things, they either spend as much money as it takes to buy off that legislative chamber or they file a ballot initiative to rewrite the rules," Frisch said.
Allied Progress released a report called "Cheaper By the Dozen" which focused on twelve US Congressman -- republicans and democrats.
Each received large pay day loan contributions and then did something on behalf of the industry.
"The total ends up being hundreds of thousands of dollars in contributions that coincide with official action taken by a dozen members of Congress.
The report singled out Tennessee Congressman Stephen Fincher for getting $7500 from payday lenders within days of co-sponsoring a bill in 2012 designed to limit regulation of the industry.
It said the next year he signed a letter to the Attorney General that questioned Operation Choke Point which it described as a program to stop unsavory lending practices.
Three days later Fincher received a $5000 contribution from a payday lending PAC.
Lawmakers who signed that letter received a total of $74,000 from payday lenders.
"Finding that again and again, I don't think that's a coincidence," Frisch said.
Congressman Fincher said in a statement, "This is absurd."
He didn't deny getting the contributions, but said his letter was meant to help a variety of lawful businesses including gun stores that were threatened by Operation Choke Point.
He declined an on camera interview.
Representative Jernigan still wants to regulate the industry.
"I want to start seeing more small businesses that my community can be proud of," Jernigan said.
Despite the temptation he continues refusing the industry's contributions.
"You shouldn't take money for something that you don't believe in," Jernigan said.
The federal government is considering major restrictions on the payday loan industry. It could put some out of business.
Jernigan is waiting to see what the federal government does before moving forward with a new bill.
Here is Congressman Fincher's entire statement:
“This is absurd. Operation Choke Point was a program the Obama Administration used to target lawful businesses it didn’t like, such as gun store owners. It would shut them down by depriving them of needed banking services without due process. Don’t take my word for it - I encourage your viewers to Google Operation Choke Point. I will absolutely oppose a government agency that tries to eliminate American’s due process rights.”
