With Wasserman Schultz Reversal, Push to Expand Disastrous “Florida Model” of Payday Lending is Dead
Allied Progress: “This was only possible because tens of thousands of Americans made their voices heard and people like Debbie Wasserman Schultz and Patrick Murphy listened.”
WASHINGTON, DC – With an endorsement of the Consumer Financial Protection Bureau’s proposed rule to rein in predatory payday lenders, Rep. Debbie Wasserman Schultz (D-FL) this morning reversed her position on the need for payday lending reform. As the Tampa Bay Times reported, the Congresswoman said in a statement:
“As a strong supporter and partner of the Consumer Financial Protection Bureau in Congress, I stand with the CFPB in its efforts to protect Americans from predatory lending. From the outset of this process, I have said that I trust the CFPB to do what’s right for consumers, and these proposed rules are an important step towards that critical goal.
I am pleased that the proposal includes lender reporting requirements to track loans and assess each borrower’s ability to repay. Florida has tracked loan data for over ten years and it has been pivotal in protecting consumers and helping to end the cycle of debt for many. The CFPB proposal also curbs the abusive lending practice of repeatedly attempting to withdraw funds from consumers’ accounts. This practice results in heavy overdraft fees for borrowers, and I support the CFPB’s plan to help rein it in and preserve access to credit without the burden of unexpected costs.
After reviewing the proposed rule, it is clear to me that the CFPB strikes the right balance and I look forward to working with my constituents and consumer groups as the CFPB works towards a final rule.”
In response, Allied Progress released the following statement:
“This is a wake-up call for progressives in Congress and every state legislature around the country. Getting in bed with the payday lending industry isn’t only bad policy, it’s bad politics,” said Allied Progress executive director Karl Frisch. “Now that both Patrick Murphy and Debbie Wasserman Schultz have endorsed the CFPB’s proposed rule to rein in predatory payday lenders, we can say without hesitation that the push to spread the disastrous ‘Florida model’ of payday lending nationally is dead. Anyone who thinks this effort is still a viable alternative to the CFPB’s proposal without the continued support of its two most influential congressional backers is delusional.”
He continued, “This was only possible because tens of thousands of Americans made their voices heard and people like Debbie Wasserman Schultz and Patrick Murphy listened. Wasserman Schultz’s willingness to reconsider her position is a testament to her thoughtful leadership and our representative democracy. She should be applauded for standing with the CFPB and working to defend the millions of Americans each year who find themselves trapped in a cycle of debt brought about by this predatory industry.”
Yesterday, Rep. Patrick Murphy (D-FL) announced his support for the CFPB’s proposed rule, telling the Tampa Bay Times, “I support the [CFPB]’s action today to exercise its authority to strengthen lending practices nationwide and protect consumers” […] “I will continue to monitor the CFPB’s implementation and enforcement should gaps in consumer protection or access to credit arise, and am hopeful that this will bring much-needed commonsense oversight to prevent abuse from hurting working people across America.”
To which, Frisch responded: “Make no mistake – the CFPB’s proposed rule flies in the face of the disastrous ‘Florida model’ of payday lending and H.R. 4018, legislation initially co-authored by Rep. Patrick Murphy. That said, the Congressman has shown true leadership and an impressive willingness to more carefully consider the plight of millions of Americans who find themselves trapped in a cycle of debt brought on by predatory payday lenders. He should be applauded for doing the right thing and coming out in support of the CFPB’s proposed rule to rein in the worst abuses of this industry. Other members of Congress could learn a thing or two from this demonstration of thoughtful leadership.”
As the result of the reversals of both Wasserman Schultz and Murphy, two of the highest profile backers of the disastrous “Florida model” of payday lending, Allied Progress has pulled its television and digital ads targeting Wasserman Schultz down and announced that its effort to hold members of Congress accountable for their work to spread Florida’s law will cease. Instead, the organization will redouble its work to hold the predatory lending industry and their powerful allies accountable as the fight to finalize the CFPB’s proposed rule moves forward in the months ahead.
Additional Background
Since last year, Allied Progress has been among those leading the fight to hold the payday lending industry and its powerful allies in Congress accountable. Last September, the organization released a report detailing how a dozen members of Congress were showered with tens of thousands of dollars in payday lender campaign cash within days of taking official actions to benefit the industry. Allied Progress also helped expose the title lender with a shady past who has spent millions of dollars on a pro-payday lending industry ballot measure in South Dakota. For several months, the organization has led rapid response efforts targeting the daily spin and misinformation from the payday lending industry and its allies at think tanks and in Congress.
In March, Allied Progress launched its payday congressional accountability campaign with a television ad targeting Rep. Debbie Wasserman Schultz in her South Florida district and an online petition at DebtTrapDebbie.com calling on her to “stop sabotaging President Obama’s hard work to hold payday lenders accountable.” The organization noted that Wasserman Schultz has received more than $68,000 in contributions from the industry while in Congress and is co-sponsoring a bill that would delay protections for borrowers while paving the way for payday lenders to continue preying on vulnerable Americans. In April, Allied Progress sponsored two billboards in Wasserman Schultz’s district and a mobile billboard in the nation’s capital. She has been aggressively challenged on her payday lending stance in local and national media subsequent to the campaign’s launch. On Tuesday, Allied Progress announced another $100,000 ad buy in South Florida designed to hold Wasserman Schultz accountable for her continued support of the payday lending industry. Earlier this month, Allied Progress released a report detailing how Florida’s political establishment had received more than $2.5 million from payday lenders since 2009. Just last week, the organization released a scathing mini-doc on the “Florida model” of payday lending and began polling its members to help decide which payday lending ally in Congress it should expose next: Alcee Hastings or Patrick Murphy.
In addition to holding key Washington decision makers accountable, Allied Progress has led the fight to expose and hold accountable industry-aligned and deceptively named astroturf front groups like “Protect America’s Consumers” and “Floridians for Financial Choice” that have sought to defend payday lenders and other predatory industries from CFPB regulation.
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