Source
Annie Lowrey | The Atlantic

Senator Kamala Harris, a California Democrat and potential 2020 presidential contender, has a Trump-size tax plan of her own.

There are two other related issues the proposals would target. The first, as Harris said, is the persistence of payday lending in depressed neighborhoods and among lower-income families. Even given the good economy, and even given the passage of the Dodd-Frank bill, strip-mall lenders and tax preparation services continue to target the financially distressed, offering loans with annual interest rates higher than 300 percent and tax-refund advances that come with obscene fees. Twelve million Americans, whose average income is just $30,000 a year, spend $9 billion a year on loan fees. The average payday loan borrower spends nearly half the year debt, and pays more in interest than she borrows in the first place.

“The business model is designed to keep borrowers in long-term debt even though it’s a short-term loan,” said Rebecca Borné, senior policy counsel at the Center for Responsible Lending. The idea would be to stop families from having to go to such lenders by making the government a kind of interest-free backstop.

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