Cash-advance, or so-called payday loans, financially cripple people who can least afford them, U.S. Sen. Dick Durbin said Tuesday at a press conference to build support for his legislation that would prevent payday-loan companies from charging exorbitant interest rates to in-need customers.

“American families are struggling in one of the toughest economies of all time; they are trying to make ends meet,” Durbin said. “These excessive rates are often hidden and can have crippling effects on those individuals who can afford it least.”

Durbin’s bill, the “Protecting Consumers from Unreasonable Credit Rates Act,” proposes a federally regulated maximum interest rate of 36 percent to replace the triple-digit rates many cash-advance lenders charge.

Financially strapped customers endure average interest rates of 400 percent, rapidly driving up their outstanding balances far beyond the amounts of their original loans, a congressional committee found in March.

Joining Durbin in his plea were Dory Rand, president of Woodstock Institute; Lynda DeLaforgue, co-director of Citizen Action/Illinois; and Ed Jacob, manager of North Side Community Federal Credit Union.

“Unfortunately for the consumer, every time policymakers in Illinois take one step forward, the industry finds a way around it and we take two steps back,” Rand said. “That’s why we need a federal law.”

“People need access to good and clear credit,” DeLaforgue said. “But we don’t need access to unfair, predatory loans that strip people of their dignity, strip people of their assets and send them into bankruptcy.”

Bankruptcy is precisely the situation Ramona Bonilla is facing. Bonilla, introduced by Durbin at the press conference, said payday loans drove her to bankruptcy.

Bonilla, 37, lives in the northwest side of Chicago and originally took out a loan of $600. Soon after, she owed double, then had to take out another loan to pay off the amassing interest.

“It got harder for me to pay, so now I’m just going to do bankruptcy,” she said after the conference. “There is no other choice.”

Durbin introduced the bill in late February. He said he is looking for co-sponsors for the legislation and hopes it will be passed in 2009.