The Department of Defense DOD, issued the final draft of its rules governing the use of cash advance or payday loans by its personnel, the new rules were issued on 31st August and are expected to be enacted with six months. In October last year congress took its first step towards regulating the payday industry by ceiling the interest charged at 36%, the defense Department rules aimed to define exactly what type of loan would be classified as a payday loan or cash advance. Rent-to-Own stores were however exempt from the definition even though they operated in similar manner to payday lenders, while some RTO’s offered payday loans as well. RTO and payday loan customers are one and the same they fall under the sub-prime category. Like payday loans RTO transactions also attract very high interest and can grow exponential if they are not serviced. Critics of the new rules are not satisfied, they believe that they leave too many loop holes for payday lenders to exploit.