As of November 2009, 31 financial institutions in 26 states, including Texas, Louisiana and Illinois, have participated in a program aimed at offering short term loans to low-income individuals.

The program offers loans of up to $2500 to those with little or no credit, as an effort to steer them away from the more dangerous lands of payday loans.

So far the program has lent over $28 Million in short term loans. The loans that are offered to individuals carry better loan terms than a payday loan, which often charge fees and have a triple digit interest rate.

Not only does the program provide quick cash when it is needed, it also gives those individuals with lower credit scores to build their credit.

A typical bank will usually offer these FDIC loans at a 14% to 18% interest rate, much better than what payday lenders have to offer.

Surprisingly, the banks participating in the program have seen relatively low default rates.