Sherrod Brown to introduce bill to provide cash advances tor low-income people

Staff report

YOUNGSTOWN

U.S. Sen. Sherrod Brown will introduce a bill to provide short-term cash advances to low-income people eligible for the Earned Income Tax Credit.

Many low-income people go to payday loan businesses to borrow money while they wait for the federal government to give them the credit, Brown, a Democrat from Cleveland, said Wednesday. Those businesses charge interest rates as high as 500 percent.

“There are more payday lending stores in the United States than Starbucks and McDonald’s combined,” he said, adding many are densely located in low- income communities.

“Ohioans shouldn’t be trapped with a lifetime of debt from predatory loans, particularly if they have tax refunds waiting for them,” Brown said. “Three-quarters of Americans who turn to costly, high-interest payday loans may have money that they can claim each tax season [through the EITC]. My proposal would provide many people who work hard and pay their taxes with an alternative to the vicious cycle of debt we so often see with payday loans.”

The EITC is a refundable tax credit for low-income Americans that encourages work and helps families make ends meet, he said. The average EITC is nearly $3,000 for families with children, Brown said.

The bill will be introduced shortly in the Senate Finance Committee.