Groups Press Rep. Debbie Wasserman Schultz to Go Further on Payday Lending Reform
High-Profile Congresswoman Now Cosponsoring Consumer Friendly SAFE Act, Move at Odds with Her Support for Disastrous “Florida Model”
WASHINGTON, DC – In a letter released today, several civil rights, policy, and issue advocacy organizations lauded Rep. Debbie Wasserman Schultz (D-FL) for being an original cosponsor of the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act of 2016. At the same time, the groups challenged the Congresswoman to stop undermining President Obama and the Consumer Financial Protection Bureau’s (CFPB) in their efforts to rein in the worst abuses of predatory payday lenders.
Those signing onto the letter include representatives from Allied Progress, The Leadership Conference on Civil and Human Rights, Center for Responsible Lending, Americans for Financial Reform, People’s Action Institute, National Council of La Raza, and CFED.
While the SAFE Act would protect consumers from some of the worst practices of the predatory payday lending industry, Rep. Wasserman Schultz is also cosponsoring H.R. 4018. As the letter notes, this legislation “would export the problematic ‘Florida model’ of payday lending laws” which have been “a disaster for consumers.”
“It is a welcome surprise to see Rep. Wasserman Schultz cosponsoring the SAFE Act. That said, she continues to cosponsor H.R. 4018, legislation directly at odds with her newfound position, which would hobble the CFPB and allow the loophole-riddled ‘Florida model’ of payday lending laws to flourish across the country,” said Allied Progress executive director Karl Frisch. “If the Congresswoman wants to demonstrate her commitment to the hardworking men and women of this country that payday lenders prey upon each day, she can start by withdrawing her support for this problematic legislation and disavowing her enthusiastic embrace of the disastrous ‘Florida model.’”
The Joint Letter (PDF Version Here):
Wednesday, April 27, 2016
The Honorable Debbie Wasserman Schultz
1114 Longworth House Office Building
United States House of Representatives
Washington, D.C. 20515-5001
RE: The SAFE Act vs. The So-Called “Florida Model” of Payday Lending Reform
Dear Representative Wasserman Schultz:
Last week it was announced that you have signed on as an original cosponsor of the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act of 2016. If signed into law, this legislation would help protect consumers from some of the worst practices of predatory lenders. It would help “give consumers control over their own bank accounts,” “close loopholes and create a level playing field in state usury law enforcement,” and “ban lead generators and anonymous payday lending.”
While your cosponsorship of this important legislation is welcome, it does not change the fact that you continue to champion the so-called “Florida model” of payday lending regulation. You remain a cosponsor of H.R. 4018, legislation that would gut the Consumer Financial Protection Bureau’s (CFPB) upcoming payday loan regulations by delaying those new rules in favor of states willing to adopt Florida-style payday lending laws.
Simply put, H.R. 4018 would export the problematic “Florida model” of payday lending laws. While a disaster for consumers, such a move would be a dream for lenders. Florida’s payday laws are riddled with loopholes: the “Florida model” has led to the average borrower being saddled with nine 300%+ interest loans each year and nearly one-in-three burdened with a dozen or more.
When President Obama endorsed the CFPB’s reform efforts, he said payday lenders are “trapping hardworking Americans in a vicious cycle of debt.” Passing H.R. 4018 would allow this cycle of debt to continue flourishing across the country just as it unfortunately has in your home state.
If you are truly concerned about predatory lending, in addition to cosponsoring the SAFE Act, you should withdraw your support of H.R. 4018 and end your efforts to protect and export Florida’s legal loansharking industry, which preys on the very people you are in office to serve.
Sincerely,
Karl Frisch
Allied Progress
Wade Henderson
The Leadership Conference on Civil and Human Rights
Mike Calhoun
Center for Responsible Lending
Lisa Donner
Americans for Financial Reform
Liz Ryan Murray
People’s Action Institute
Lindsay Daniels
National Council of La Raza
Andrea Levere
CFED
BACKGROUND:
In March, Allied Progress launched the “Debt Trap Debbie” campaign with a television ad in Wasserman Schultz’s 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.” Wasserman Schultz has received over $68,000 in contributions from the industry while in Congress and is a co-sponsor of 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.
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