SAN DIEGO -- With a family to feed and no money for groceries, Navy Yeoman 2nd Class Damon LaForce recently did something the military is trying to crack down on: He went to one of the many payday-lending businesses near his base for an instant loan.

Essentially, he borrowed against his next paycheck: After showing his military ID and a proof of address, LaForce wrote the lender a postdated check for $300. Five minutes later, the sailor walked out with $255 cash in his pocket.

The $45 charge for his two-week loan would amount to an annual interest rate of a staggering 459 percent.

Worried that too many members of the military are falling to victim to ruinous interest rates and getting into deep financial trouble, the Pentagon is backing an effort in Congress to slap a nationwide cap of 36 percent on payday loans to troops. An increasing number of states are taking steps, too.

In a report released in August, the Defense Department estimated that 225,000 service members -- or 17 percent of the military -- use payday loans. The Center for Responsible Lending, a nonprofit group seeking stricter industry controls, says that one in five service members took out such a loan in 2004, and that someone who borrows $325 pays an average of $800 in charges.

"You are not doing a service to an individual who is already short on cash, so he's living not just paycheck to paycheck, but from almost paycheck to almost paycheck," said Capt. Mark D. Patton, commanding officer for Naval Base Point Loma in San Diego, where LaForce is stationed.

Many payday loan businesses are clustered near military installations, with nearly two dozen of them around Camp Pendleton.

Patton said the Navy is worried that payday loans are contributing to the surge in the number of sailors who cannot be sent into duty overseas because of financial problems.

Under Navy rules, sailors whose debts are more than 30 percent of their income cannot be sent overseas, because their financial problems could distract them from their duties or, worse, make them vulnerable to bribery.

Patton said since 2000, the number of sailors and Marines barred from deployment because of financial problems has climbed 1,600 percent, straining an already stretched military. 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, he said.

"I have guys guarding my gate here when they should be deployed in Iraq," Patton said.

Industry officials say payday loans offer a service when no one else will. They say a lower cap could force some military lenders to close, driving sailors and soldiers to unregulated lenders, including Internet sites registered outside the United States.

The trade group representing payday lenders, the Community Financial Services Association, said members of the military are a small portion of business and are not victims of unscrupulous lenders.

"The allegation that payday lenders target members of the military is simply false," said Darrin Andersen, president of the association.

Some states prohibit triple-digit rates on payday loans, according to the Consumer Federation of America. But in California, state lawmakers rejected a bill Thursday that would have given military borrowers a 180-day grace period and no-cost extensions while they were on duty overseas.

Military bases offer financial counseling and zero-interest emergency loans to troops in trouble. They also can recommend credit unions that offer low-interest loans.

On the Net:

Center for Responsible Lending: www.responsiblelending.org

California Financial Service Providers: www.cfsponline.com