By Annys Shin
Washington Post Staff Writer

After going on disability four years ago, Pauline Charles found herself tight on cash and thought her prayers had been answered when she responded to television ad promising loans to anyone who owned a house or car.

The 50-year old Baltimore resident, who had a car, borrowed $2,000 and by the time she paid it off 18 months later, she had shelled out a total of $11,000 in interest and fees.

"I went in already with financial problems and it just made my situation worse," she said.

Charles was among several dozen protesters who descended upon bank branches in downtown Washington yesterday as part of a multi-city campaign to bring back usury laws. They are calling for a national interest rate cap of 10 percent for credit cards and other types of consumer loans. Similar actions took place in Durham, N.C., New York, Boston, Chicago and in London.

The groups that organized the event, which include the Washington Interfaith Network and Actions in Montgomery, have also sent letters demanding meetings with the chief executives of Wells Fargo, Citibank, Bank of America, Capital One, Discover and J.P. Morgan Chase.

Many states have usury laws that cap interest rates charged to consumers, but they do not affect rates charged by nationally chartered banks, which includes most major credit card issuers. Credit card companies frequently charge interest rates of more than 20 percent. A law passed by Congress earlier this year restricting arbitrary and excessive credit card fees has done little to quell complaints among consumers that they are being gouged by credit card issuers. Banks have responded by jacking up the fees they charge credit card holders.

A national interest rate cap of 9 percent was in place until 1980. Efforts to reinstate a national cap have met with mixed success. In May, an effort in Congress to set a 15 percent interest rate cap lead by Sen. Bernard Sanders (I-Vt.) garnered only 33 votes. However, three years ago Congress passed a 36 percent cap on loans to military borrowers of payday loans after a Pentagon report documented the impact of such loans on service members.

Lenders say a national interest rate cap would be bad for consumers.

"Payday loans are typically two weeks. A 10 percent rate cap would mean the industry could charge under 40 cents per $100 loaned for two weeks. Even a charity like Goodwill Industries charges $9 per $100 loaned for its payday loan alternative," said Steven Schlein, a spokesman for the Community Financial Services Association of America, a trade group for payday lenders. "A rate cap simply means a ban on short-term loans."