SALEM - In Oregon, there are more payday loan stores than McDonald's.

Catholic leaders and other advocates for the state's working poor are taking aim at the shops, which charge lofty rates for quick and easy loans. The practice makes it difficult for poor people to pay for food and other necessities, says Bob Castagna, executive director of the Oregon Catholic Conference.

'The issue of payday loans presents a public policy issue with a moral component,' Castagna said March 15 at a hearing in the State Capitol. Oregon lawmakers are considering placing a limit on payday loan fees and extending payback periods.

Use of the stores is on the rise in the state. There were about 300,000 payday loans processed in Oregon in 1999. By 2003, the number rose to 700,000.

Quoting from Scripture to make his point that gouging the poor is immoral, Castagna called the proposed legislation 'a reasonable effort to permit payday loan services to continue in Oregon, while at the same time affording consumers the benefits of a public policy reflecting economic justice for the working poor and some well-deserved relief.'

Senate Bill 545 would bring Oregon into line with Washington and California, capping loan origination fees at $15 per $100. It would also prohibit the renewal of a payday loan unless the consumer has paid at least 25 percent of the principal amount of the loan plus interest on the remaining balance and prohibits fees other than interest and the fee for a dishonored check. The legislation also would give borrowers a month, instead of two weeks, to pay up.

'Oregon now finds itself among a minority of state without an interest rate cap,' Castagna told the Senate Commerce Committee. Idaho and Nevada are also in the group. Castagna pointed out for the lawmakers that payday loan businesses have remained intact in Washington and California.

Portland State University student Rick Freed told the Senate panel about his own experience with a payday loan. After having dug through his couch in December, he went and borrowed $75. But before he could pay it back, he lost his job. After eight weeks, he ended up paying $60 interest.

He asked lawmakers to reform the 'predatory policies.'

Sen. Ryan Deckert, a Democrat from Beaverton, spoke of interest as high as 300 percent or more.

'That is a rate that gives pause and discomfort to anyone,' Deckert said.

Rep. Jackie Dingfelder, a Northeast Portland Democrat, says she has seen Oregonians 'trapped in a cycle of debt created by exorbitant fees.' Dingfelder serves on hunger relief task force, which supports this bill as one way for people to keep their cupboards supplied.

'I urge you to protect vulnerable citizens from these exploitative lending practices,' she told the committee.

A major backer of the rate-limit legislation is the Oregon Food Bank.