Payday loans can be a way to get cash when you have no other option. However, you often pay a lot more than you bargained for. Some banks and credit unions are offering an alternative to payday loans. Marketplace Money recently covered the topic and explained how the FDIC wants to see more of these alternatives. They tell a story of an individual who took advantage of 'grace loans' offered by her credit union.
Of course, the banks aren't operating as charities. Many institutions will step up to help their community, but others complain that it does not make economic sense to offer alternatives to payday loans. To get more details, see the Marketplace Money story (you can also listen to the audio program).