A new report says that payday loans cost Americans more than $4 billion in excessive fees, but the document praised Maine and other states that have enforced reasonable loan caps. The Pentagon, which found that a growing number of soldiers couldn’t be deployed because of debt, convinced Congress to cap the interest on loans to military families. While some states, including Maine, have addressed the problem, most have not, so expanding the protections recently given to military personnel is necessary.

According to a study by the Center for Responsible Lending, which aims to combat what it calls “abusive financial practices,” payday loans cost Americans $4.2 billion each year because of the excessive fees charged by lenders. Such loans are typically small, but because of fees and high interest rates, the amount needing to be repaid can quickly balloon.

The study found that the average borrower paid $793 for a $325 loan. This mirrors a Pentagon study done earlier this year. It found many instances where enlisted personnel took out payday loans for a few hundred dollars, were unable to repay the money, borrowed more and became deeper in debt. Many filed for bankruptcy, which brings disciplinary action from the military.

Since 2000, the number of sailor and Marines barred from deployment because of financial problems climbed 1,600 percent, according to The Associated Press. Security clearances were denied or revoked because of financial difficulties for some 2,000 sailors last year, and the trend is similar in other services, the AP reported.

To stop this, the Pentagon called for a cap of 36 percent interest on payday loans, that all fees be clearly disclosed and that a person’s ability to repay be considered before a loan is made. These protections were included in the Defense Authorization bill signed by President Bush this fall.

In Maine, payday loans are covered by the state’s Consumer Credit Code, which sets limits on interests and fees. These rules save Maine families $25 million a year, the Center for Responsible Lending projects. Lawmakers recently rejected an attempt by the payday loan industry to raise the level of permissible fees and interest rates. Such a change was expected to dramatically increase the number of such operations in Maine. Currently there are only six payday loan firms operating in Maine with one in Bangor. Some states have more than 1,000 offices.

Protections like Maine’s and the military’s should be extended to consumers nationwide.