Santa Clara County Moves To Curb Payday Lenders

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The storefront of a payday lender in San Jose. (CBS)

The storefront of a payday lender in San Jose. (CBS)

SAN FRANCISCO (CBS/AP) – Santa Clara County has decided to rein in predatory payday loan outfits by imposing a moratorium that prevents more lenders from setting up shop.

Supervisors voted on Tuesday to impose the 45-day moratorium while a law is drafted to restrict new payday businesses or permanently ban them.

Payday lending operations have proliferated in California.

Santa Clara County has 64 payday loan storefronts concentrated in low-income neighborhoods.

County officials are concerned more lenders could move into unincorporated county areas because a growing number of cities are restricting them.

KCBS’ Matt Bigler Reports:

Payday loans attract desperate borrowers. In exchange for a postdated paycheck or benefits check, they get $255 and must pay back $300 when the borrower gets paid in two weeks or a month.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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