The outstanding loans aren't just a danger to bank accounts. Military personnel are often consumed by their struggles to make ends meet.

"They are distracted, and as a result of that, they put themselves and their shipmates in a potential position where they can be hurt, or potentially killed," said French, the Navy's northwest commander, who is urging lawmakers to institute harsher restrictions on the payday loan industry.

Last year the Legislature enacted law that banned payday lenders from contacting the boss of a military borrower to collect an overdue payment. This year, under Senate bills sponsored by Sen. Darlene Fairley, D-Lake Forest Park, the military is seeking to cap annual interest at 36 percent, limit borrowers to one $500 obligation at a time, and prohibit a lender from giving loans to a borrower's spouse.

Those bills aired Wednesday before the Senate Financial Institutions, Housing & Consumer Protection Committee. Additional measures were offered to the House Financial Institutions & Insurance Committee on Tuesday and Thursday.

"We're not interested in driving anybody out of business, we're just looking for a fair market," French said in an interview Wednesday.

While 15 states have strict regulations on payday lending, current Washington law allows 15 percent interest on a 14-day loan, which can produce an annual rate as high as 391 percent.

Under the new restrictions, lenders that specialize in short-term, high-risk loans would only make 10 cents per day on a two-week loan of $100.

The drastic cut in rates would doom an important industry, Dennis Basford, CEO of Seattle-based MoneyTree, argued before the Senate panel.

"This bill is nothing more than a prohibition bill that eliminates the payday loan as a choice for Washington state consumers," Basford said.

Used frequently to cover a debt quickly before payday, such loans are about as accessible as a cup of coffee. In fact, with an army of 711 branch offices in the state, payday lending shops outnumber Starbucks locations by about 150.

Statewide, the $1.2-billion industry has doubled in volume since 2000. Nationwide, such lenders have evolved into a $40 billion behemoth.

"We've watched as the payday lending has just had this huge surge over the last 10 years," said Julie Watts, spokeswoman for the Seattle-based Statewide Poverty Action Network.

Payday lending branches, locked in on cash-strapped demographics, have grown strong roots near military bases.

There are 16 payday lenders crammed into the Fort Lewis zip code, more than any other zip code in the state, according to a national study performed by researchers from the University of Florida and California State University. The analysis found 36 payday lenders within three miles of the Army post and nearby McChord Air Force Base.

"Financial trapping" has become such a scourge for military personnel nationwide that the U.S. Defense Department has listed payday lending as one of the top 10 issues facing military families.

Twenty percent of active-duty personnel used a payday loan last year, according to the non-profit Durham. N.C.-based Center for Responsible Lending, though most organizations, including the Pentagon, estimate the figure at about 7 percent.

"This is a problem that hasn't gone away," said Liz Kosse, director of the Navy-Marine Corps Relief Society in Bremerton. "We need more help with this."

The society estimates that it spent around $1 million statewide last year on financial aid to its personnel.

Basford and other lenders previously led a push to regulate their own industry. Payday lending, legalized here in 1995, soon came under caps on interest rates and loan sizes, and limitations on refinancing.

In 2004, the state Department of Financial Institutions received just 125 complaints about payday lenders as consumers made a record 3 million short-term loan transactions.

"This whole issue of payday lending revolves around choice," Basford said. "Are we going to provide consumers with choices and let them make their own decisions? Or are we going to deny them choices, which would force them to use less attractive alternatives?"

Opponents deem the system predatory.

Low-income families living paycheck to paycheck sometimes use the loans to stay ahead on bills. But instead of finding help through the short-term loans, many payday borrowers end up in a near-addictive cycle. Over 50 percent of borrowers take out more than five loans in a year, and some take more than 30, according to the DFI.

"We're already one of the most regulated states in the country on this issue," said Sen. Dave Schmidt, R-Mill Creek, an active member of the National Guard. "You're now going to take an industry, almost put them out of business, and it's not going to stop the problem."

"The real problem is a compulsive, addictive behavior problem of some individuals," he said.

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The payday lending bills are Senate Bills 6736, 6737 and 6738, and House Bills 2359, 2360, 2852 and 3167.