Payday loans are a noxious entrant on the credit landscape.

They take advantage of people who need money – and need it now – by charging them usurious interest rates. Legislation introduced this year in Augusta would have rewritten the rules for these operations, exploded the amount of interest they could charge, eliminated valuable consumer protections and opened the state for growth in an industry we don’t need.

Currently, the laws governing payday lenders in Maine are consumer-friendly. They put a dollar limit on the amount that can be charged to make a loan and protect consumers from aggressive debt collection techniques. In addition, the businesses are strictly regulated under the Consumer Credit Code by the Office of Consumer Credit, which makes sure they are in compliance with state law.

L.D. 788, which was discussed during a work session last week, would have changed all that. Misnamed “An Act to Establish Consumer Protections and Regulations for Deferred Deposit Loans,” the bill would have made the state more friendly to high-interest, short-term loans and the corporations that profit from them.

Consumer protections already exist, and the regulations on deferred deposit loans are strict. The state sets limits on the fees charged to get a loan. Lenders can charge $5 for a loan up to $75 with a minimum term of one week, $15 for a loan greater than $75 but less than $250, and $25 for a loan of $250 or more. According to the Office of Consumer Credit, the most common loan is for $250, on which consumers pay 10 percent for one week. Do the math: That’s about 520 percent if the loan were to be floated for a year.

Maine law also protects borrowers from having attorneys’ or collection agencies’ fees added to their loan amounts if they default. It places the risk for the loan on the lender.

Under L.D. 788, all of that would have been history. The new maximum interest rate would be 17.5 percent with a minimum term of one week. The same $250 loan would cost the borrower almost double, $43.75 instead of $25. Over a year, the rate would be about 910 percent. The bill would also have taken oversight out of the Office of Consumer Credit, created a new oversight agency and allowed the addition of collection and lawyer fees onto the principal.

The first payday loan office opened in Maine in 1997. Since then, five others have opened, including three in 2004 alone. They are profitable and have been able to find customers despite the state’s tough laws.

There’s no reason to make the laws softer.

The payday loan group behind the legislation, the Community Financial Services Association of America, which is located in Alexandria, Va., would like its members to be treated differently than other lenders. They would like the state opened up and deregulated, so profits are easier to make. Lawmakers should not do them any favors.

Payday loans contribute to the spiral of debt that holds many people down. Borrowers find themselves unable to get off the ride, paying only the interest on a relatively small loan every week, while floating the principal. They become stuck on a treadmill and can’t get off.

It’s unlikely that the bill will become law this year. An amendment has been attached to strike much of its substance and mandate a study of Maine’s payday loan industry. But you can bet it will be back.

Maine has no business easing the rules on an industry that preys mostly on the working poor through usurious lending practices.