How Debt Plays Into the South Carolina Democratic Primary
- Predatory loans target African Americans in state, report says
- Sanders, Warren have pushed for curbs on high-interest loans
In the 20 minutes it takes Reverend Brenda Lynn Kneece to drive from her home in Columbia, South Carolina to her church about 15 miles north, she passes by at least two dozen billboards and businesses offering payday loans.
Lynn Kneece says she’s often approached at the church by people who’ve borrowed from these places, fallen deeply into debt, and are pleading for financial help. She works with the Appleseed Legal Justice Center, a local group that’s trying to raise awareness of the problem -- especially among Democratic presidential candidates, who’ll face off on Saturday in the state’s primary contest.
“In this economy, a job is easy to have filled,” she said by phone from her home. If an employee misses a day or two, “she can get fired. She goes to payday lenders, borrows, and is expected to pay that back in two weeks. It’s a seduction into taking what’s promoted as the easy way out of trouble.”
As President Donald Trump seeks re-election on what he calls a “blue-collar boom” in economic growth and jobs, Democrats say millions of Americans aren’t feeling the benefits. South Carolina, which will be the biggest and most diverse state to pick a candidate so far, offers evidence for both arguments.
It has the country’s lowest unemployment rate, and two of its metro areas rank among the top 10 nationwide for labor-force growth. But Sue Berkowitz, Appleseed’s director and co-author of a forthcoming report on South Carolina’s household-debt problems, says she regularly hears stories from “mostly African-American women who are ending up in these horrible lending situations -- not because they’re not working but because they’re working low-wage jobs.”
African-Americans, who make up the majority of South Carolina’s Democratic primary voters, are a particular target for predatory lenders, according to Appleseed, which says the problems of household debt should be a major focus for Democratic candidates.
Some have addressed the issue. National frontrunner Bernie Sanders introduced legislation last year to cap consumer-loan interest rates at 15%. Both he and Elizabeth Warren, who helped create the Consumer Financial Protection Bureau, have sponsored legislation to curb payday lending.