Hard-Hitting Video Demolishes the Disastrous “Florida Model” of Payday Lending as CFPB Prepares Tough New National Rules
Tough Mini-Doc Released in Advance of Expanded Effort to Expose Industry’s Congressional Benefactors
WASHINGTON, DC – With the Consumer Financial Protection Bureau (CFPB) expected to announce tough new national rules for payday lending on June 2, Allied Progress today released a hard-hitting video that demolishes the disastrous “Florida model” of payday lending, which is being advanced by many in the state’s congressional delegation in an effort to sabotage efforts by President Barack Obama and the CFPB to rein in the worst abuses of this predatory industry.
The video release is timed as Allied Progress and its supporters begin a final round of voting to determine whether Rep. Patrick Murphy or Rep. Alcee Hastings will be the next target of the organizations on-going campaign to hold the payday lending industry’s congressional benefactors accountable. Voting begins May 24 and the winner will be announced on June 7 with an accompanying paid media campaign including television ads and more.
“Payday lenders have found some of their best friends in Congress among Florida’s delegation. This unsavory industry has spent millions of dollars currying favor with the Sunshine State’s political establishment and it is important that Floridians know what payday lenders got for their investment: the ability to hock payday loans with 300%+ interest rates under the banner of supposed reform,” said Allied Progress executive director Karl Frisch. “This video demonstrates how deeply intertwined the payday lending industry is with Florida’s elected officials. It paints a picture of the stark reality faced by too many Floridians: a crippling cycle of debt perpetrated by the payday lending industry and abetted by the powerful elected officials they’ve invested in. In the weeks ahead Allied Progress will expand its congressional accountability efforts – working next to expose the payday pandering of either Rep. Patrick Murphy or Alcee Hastings. We invite the public to help us make that decision by making their voice heard on our website.”
Those wishing to cast a vote may do so at: AlliedProgress.org/WhoIsNext
According to the Center for Responsive Politics, Rep. Hastings has accepted more money from the payday lending industry than any other current member of Congress from Florida – at least $116,700. On several occasions, he has taken official actions to benefit the industry within days of accepting these contributions. Rep. Murphy on the other hand, has taken at least $51,000 from payday lenders during his short congressional career. Both Hastings and Murphy signed a letter encouraging CFPB director Richard Cordray to adopt the disastrous “Florida model” of payday lending. Murphy is also the sponsor and Hastings a cosponsor of H.R. 4018, which would gut the CFPB’s upcoming payday loan regulations by delaying those new rules in favor of states with Florida-style laws where the average borrower is saddled with nine 300%+ interest loans each year and nearly one-in-three are burdened with a dozen.
The CFPB is expected to announce new rules for the payday lending industry on June 2nd during a field hearing in Kansas City, Missouri. Allied Progress and its members will be watching to see how the Florida delegation, especially Reps. Debbie Wasserman Schultz, Alcee Hastings and Patrick Murphy respond to the announcement.
“Anyone” – 2 Minutes
“It could happen to anyone. It starts with a car payment or maybe an electric bill. You borrow a little, just to make ends meet, just until you get your next paycheck. It sounds easy. But then you can’t pay back the loan quickly, because of sky-high interest rates and excessive fees. So you take out another loan. To pay off the first loan. And the interest mounts. And the payments increase. It never seems to end.
That’s how payday lenders trap hardworking Americans in a vicious cycle of debt while they make billions of dollars every year. Now, President Obama is fighting for tough regulations to crack down on payday predators. He wants to end the debt trap, once and for all. But Florida politicians are standing in the way. They have their own quote “reform plan” but it’s full of holes.
Under the “Florida model”, the average borrower pays more than 300 percent interest and ends up taking out nine loans a year. Worse still, one-in-three borrowers takes out a dozen. What gives? Predatory lenders give… millions to Florida politicians. People like Representatives Debbie Wasserman Schultz, Alcee Hastings, and Dennis Ross.
In fact, a new report from Allied Progress reveals that the payday lending industry has given over $2.5 million dollars to Florida politicians since 2009. $50,000 to Debbie Wasserman Schultz, $110,000 to Alcee Hastings, $31,000 to Dennis Ross. The list goes on and on. Even the front man pushing the “Florida model” is a former Congressman who received $119,000 in campaign cash from predatory lenders — more than any other member of Congress from Florida.
It’s no surprise that these payday politicians stand with the payday predators, and against President Obama. Not surprising. And not right. We need real reform on predatory payday lending. Visit Allied Progress.org/Payday to learn more and take action.”
In March, Allied Progress launched its payday congressional accountability campaign the 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.” Wasserman Schultz has received more than $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. Earlier this month, Allied Progress released a report detailing how Florida’s political establishment had received more than $2.5 million since 2009.
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