Critics of the payday lending business are continuing to persuade state legislators to get tough on the industry. Over the weekend, a new proposal was made to the General Assembly.

In September, the Staunton City Council adopted a resolution to cap interest rates at 36 percent for payday loans. Under the new proposal, loans could be based on income, instead of using a set cap. The question is whether or not legislators agree this new proposal will work.

"It's not the amount they're lending. It’s the interest rate that's being charged," says Councilman Bruce Elder, who started the grassroots call against payday lending.

Elder says creating a loan based on your income isn't the point.

He says, "People aren't taking advantage of it. Thirty-six percent is an awesome amount of interest. Three-hundred-ninety-percent plus is outrageous."

Payday lending agency Check 'N Go spokesperson Yancy Deering doesn't agree.

He says, "Check 'N Go prefers to determine the risk we find acceptable without mandated, unrealistic caps from the government. There are other bills in the General Assembly with meaningful reforms that responsibly address concerns about payday loans in Virginia without tying loan amount to income."

Credit unions, churches and non-profit organizations have started to offer low-cost cash advances as an alternative and Elder supports this growing effort.

"Twenty-two faith based organizations throughout the Commonwealth, spanning every possible religion, have endorsed this as well, presenting hundreds of churches," says Elder.

Fifty-eight communities have signed either the Staunton resolution or added it to their agenda, though Deering says it shouldn't be an issue.

"Because we want to loan customers only what they can afford to pay back, Check 'N Go has developed its own underwriting standards to evaluate the risk associated with a loan," says Deering.

Legislators have filed more than a dozen bills to either get rid of the payday loans, change the rule regarding them, or cap the annual interest rates for them.

Elder says that the Dupont Community Credit Union is one among many organizations considering offering low-cost cash advances. According to the State Bureau of Financial Institutions, more than 434,000 people in Virginia took out loans last year, totaling $1.3 billion.