Cleveland To Limit Payday Loan Shops

CLEVELAND (AP) - While the state tries to cap the interest rates on short-term, "payday" loans, Cleveland is moving to limit the number of payday lenders.

The city council voted unanimously on Monday to allow for only one cash-advance business for every 20,000 residents. Those stores also would be barred from opening 1,000 feet apart.

A study done for the council found Cleveland currently has 80 of the stores. The new regulation would call for only 22, given the city's population, though existing stores are grandfathered.

The measure is modeled after a zoning code change made this year in suburban Parma.

Cleveland's crackdown comes as payday lenders ask Ohio voters to overturn a new state law cutting the top interest rates on the loans from 391 to 28 percent.