SJ to impose cap on payday loan businesses

SAN JOSE, Calif. (KGO) -- San Jose is set to become the largest city in the nation to impose a cap on the number of businesses that make payday loans.

The city council is expected to pass an ordinance tonight limiting the number of payday lenders to 38, the number of lenders already doing business in the city. It would also prevent future stores from opening in or near low-income neighborhoods.

Payday loans offer a quick way for people to get a maximum of $300 in cash. In return, they must promise to repay the loan plus a $45 fee within two weeks.

Opponents say limiting payday loans would hurt people who depend on them.

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