A handful of credit unions suggest a middle way — a form of payday loan that automatically builds a savings account designed to break the payday cycle. If compromise is possible, the credit unions may point the way.

ST. LOUIS — The word “gouge” comes to mind at the thought of paying 20 percent interest on a two-week loan.

But if you spend some time hanging out at payday loan shops — as I’ve done twice in years past — you get a more nuanced view of the industry.

Payday loans certainly sting borrowers, charging interest at annual rates averaging 444 percent. But they also fill a need for people desperate for cash.

“I got home and there was a note on the door that said that if I don’t pay by tomorrow they’re going to turn off the electricity. That’s why I’m crying and upset,” said one woman in Arnold as she held her little boy’s hand. She’d just agreed to pay $80 in interest on a two-week loan of $400.

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