Democratic National Committee chairwoman Debbie Wasserman Schultz has signed a bill designed to delay Elizabeth Warren’s progressive agency from starting its goals.
The agency, entitled the Consumer Financial Protection Bureau, seeks to regulate payday lenders. Its goal is to prevent “turned” loans, wherein someone must take out a loan to pay the interest on another loan, starting them into a spiral of debt.
Wasserman Schultz is cosponsoring bill H.R. 4018 (Consumer Protection and Choice Act), which will delay these regulations from starting for two years. She says she wants to model the bill in a new Florida law, but is nonetheless faced with steep criticism. Gynnie Robnett, director of Americans for Financial Reform’s Campaign to Stop the Debt Trap, claims the Florida law is backed by the industry it seeks to regulate.
“The problem here is that Florida law is a sham,” he said. “It was backed by the industry.”
Multiple consumer groups, including the NAACP, the National Consumer Law Center, and the Southern Poverty Law Center sent a letter in December to every member of Congress urging them not to support the bill.
Sean Bartlett, Wasserman Schultz’s spokesman, issued a statement to the Huffington Post defending H.R. 4018:
“As a state lawmaker, she helped write Florida’s law that has sharply reduced the need to go to bad actors, curbed predatory practices and created standards and protections for low-income borrowers. The Congresswoman wants to work with the CFPB on the way forward, and believes the Florida law is an example of how to achieve their shared goals of balancing strong consumer protections with preserving access to credit in underserved communities.”
Nonetheless, the Florida law Wasserman Schultz defends has not dented the rate of turned loans in the state. They make up about 76% of the state’s issued payday loans. The average interest rate on payday loans in Florida is 304%. The average loan payment is approximately one third of the state’s average paycheck.
Open Secrets reports that the financial industry has given Wasserman Schultz over $260,000 throughout her career as Congresswoman.
