A short-term cash advance that is made to an employee in exchange for the employeeÂ’s post-dated check in the amount of the cash advanced plus a transaction fee. Authorization also may be given to do a debit transaction in the future. Usually, the interest rate charge is quite high, especially when calculated in terms of an annual percentage rate. In the spring of 2003, the Federal Deposit Insurance Corp. issued new guidelines, designed to protect borrowers, for banks to follow when making payday loans. The FDIC recommended that banks establish cooling-off periods between loans and verify that customers have only one payday loan outstanding at a time.