Florida Progressives Support CFPB’s Payday Reforms, Apparently Alcee Hastings Didn’t Get the Memo

Apparently Rep. Alcee Hastings didn’t get the memo that Florida progressives no longer support the disastrous “Florida model” of payday lending and are instead backing the CFPB’s proposed rule to rein in the worst abuses of this predatory industry. Just last week Reps. Debbie Wasserman Schultz and Patrick Murphy abandoned their support for the “Florida model” in favor of the CFPB’s approach.

Hastings Wrote Op-Ed Bashing CFPB Proposed Rule to Rein in Worst Abuses of Payday Lenders…

Rep. Hastings Wrote An Op-Ed Saying The CFPB Rule “Will Cut Off Access To Short-Term Credit” For Those In Need. “The Consumer Financial Protection Bureau (CFPB) recently announced a rule to better protect consumers from unscrupulous small-dollar loan practices. Like my colleagues in Congress, I welcome new protections that will ensure consumers do not fall into debt traps. However, if the CFPB imposes regulations without carefully balancing the needs of consumers, it will fail to provide financial protection to those who need it most. I fear that in trying to protect consumers, the CFPB’s rule will cut off access to short-term credit without providing another avenue for those who need these types of loans. This, in turn, could force consumers to turn to more expensive alternatives, or worse, unregulated or otherwise illicit venues for securing loans.” [Washington Times: Alcee Hastings Op-Ed: “Payday Lending Rules That Work,” 6/8/16]

…after Taking Almost $118,000 in Payday Lender Cash

Hastings Has Taken $117,950 In Payday Lender Contributions In His Career — more than any current member of Congress from Florida. [Center For Responsive Politics]

RHETORIC: CFPB Rule Should’ve Taken Same Approach As “Florida Model” Of Payday Lending.

Alcee Hastings wrote in an op-ed, “When the CFPB announced that it would be proposing a rule on payday lending, I was hopeful that it would take the same balanced approach that the Florida legislature took. I met with Mr. Cordray on June 2, 2015, to weigh in on the CFPB’s rulemaking process. At that meeting, Mr. Cordray acknowledged the success story of the Florida model and suggested it be considered as part of any regulatory framework established by the CFPB. He further indicated that he was in contact with Mr. Breakspear, whose is responsible for implementing the Florida law. I urged Mr. Cordray to travel to Florida to see firsthand the implementation of Florida’s model, and to meet with the consumers utilizing these services.” [Washington Times: Alcee Hastings Op-Ed: “Payday Lending Rules That Work,” 6/8/16]

REALITY: The “Florida Model” Is a Payday Lender’s Dream: Riddled with Loopholes, Massive Interest Rates, Average Borrower Takes Out 9 Loans.

Payday Lenders in Florida Claimed They Were Credit Service Organizations Not Subject to Florida’s Payday Lending Law.

“Last year, the state Office of Financial Regulation began looking into the practices of EZMoney and Cash America, two Texas-based chains that claim to be “credit-service organizations” not subject to Florida’s payday-loan law. “We’re in the early, fact-finding stages with both of them,” said Ramsden, the agency administrator. “We are aware they’re citing Florida’s credit-service organization law, which was intended to help consumer-credit agencies. In this situation, however, we have payday lenders using it to broker payday loans.” [Orlando Sentinel, “Some Payday Lenders Are Flouting Florida’s Reform Law”4/1/2007]

Payday Lenders Claim They Aren’t Subject to Florida’s Payday Lending Law Because They Don’t Receive a Post-dated Check but Rather a Promissory Note That Allows Them to Automatically Withdraw Funds from the Customer’s Bank Account.

“Here’s their argument: The state’s payday law pertains only to lenders that require customers to give them a postdated check written for the amount owed. When the loan comes due, the lender simply cashes the check. But Cash America and EZMoney require no such check — only a promissory note that authorizes the lender to automatically withdraw the money from the customer’s bank account.” [Orlando Sentinel, “Some Payday Lenders Are Flouting Florida’s Reform Law”4/1/2007]

A Typical Payday Loan in Florida Charges 304% Apr, and Most Florida Payday Loan Customers Take Out Nine Payday Loans a Year.

“Data compiled by the nonpartisan Pew Charitable Trusts is similarly dismal. A typical Florida payday loan customer ends up taking out nine payday loans a year and is stuck in debt for nearly half of that year, according to Pew. The average interest rate on Florida’s payday loans is 304 percent — only slightly better than the 390 percent annual average. Critically, the average payday loan amount of $389 is equal to 35 percent of average paychecks in the state — in line with national figures.” [Huffington Post: “DNC Chair Joins GOP Attack On Elizabeth Warren’s Agency”, 3/1/2016]

Check Into Cash Advertises a Payday Loan with an APR of 391.07% In Florida. [Check Into Cash Website, Access 3/8/2016]

Amscot Financial Advertises Payday Loan Rates as High as 312.86%. [Amscot Financial Website, Accessed 3/8/2016]

In Florida, There Are Frequent Rollovers With the Average Borrower Taking Out 8.8 Loans Per Year and Almost a Third of Borrowers Taking Out 12 or More Per Year

Screen Shot 2016-03-08 at 11.07.04 AM

[Center For Responsible Lending, “Payday Lending Abuses and Predatory Practices” 09/2013]

32.7% of Florida Payday Loan Customers Took Out 12 Loans or More Per Year. [Veritec Solutions Report for The Florida Office of Financial Regulation, May 2012]

PARTING SHOT: Rep. Alcee Hastings Has Taken Massive Amounts of Payday Lender Cash Since He Started Promoting the “Florida Model” of Regulation

In October 2015, Hastings Took $23,500 from Payday Lenders…

  • Ace Cash Express, Inc. PAC | 10/2/2015 | $5,000
  • CheckSmart Financial LLC PAC | 10/8/2015 | $5,000
  • Financial Service Centers of America, Inc. PAC | 10/10/2015 | $5,000
  • Financial Service Centers of America, Inc. PAC | 10/10/2015 | $5,000
  • Fraser MacKechnie (Amscot Financial) | 10/19/2015 | $1,500
  • Robert Wolfberg (Financial Services Inc.) | 10/19/2015 | $1,000
  • Fred Evensen (CashSmart) | 10/19/2015 | $1,000

[Center for Responsive Politics, Accessed 3/8/2016]

 …and One Month Later Co-Sponsored Legislation Based on the “Florida Model” That Would Delay the CFPB’s Payday Lending Rule by Years

November 16, 2015: Hastings Co-Sponsored HR 4018, The Consumer Protection and Choice Act. [Congress.gov; HR. 4018]

  • Consumer Groups and Community Organizations Opposed HR 4018 Saying It Would Delay The CFPB’s Rulemaking On Payday Loans by Two Years or More and Was an “Industry-Backed Proposal Based On Florida Law.” “The undersigned civil rights, consumer, labor, faith, veterans, seniors, and community organizations, strongly urge you to oppose H.R. 4018, the “Consumer Protection and Choice Act.” This harmful bill would limit the Consumer Financial Protection Bureau’s (CFPB) ability to protect all consumers against high-cost payday, car title, and installment loans. In addition to delaying the Bureau’s rule-making for two years or longer, H.R. 4018 would allow the payday industry to avoid federal regulation altogether by pushing an industry-backed proposal based on a Florida law1 that has proven ineffective at stopping the payday loan debt trap.” [Center For Responsible Lending, Letter To Congress From Consumer Groups, 12/15/15]

…and Eight Days Later Got Another $500 From Payday Lenders

  • World Acceptance Corporation PAC | 11/24/2015 | $500

[Center for Responsive Politics, Accessed 3/8/2016]

April 2015: Hastings Took $8,750 From Payday Lenders…

  • CheckSmart Financial LLC PAC | 4/23/2015 | $2,500
  • Financial Service Centers of America, Inc. PAC | 4/23/2015 | $1,250
  • Ian MacKechnie Jr. (Amscot Financial) | 4/27/2015 | $2,500
  • Jean MacKechnie (Amscot Financial) | 4/27/2015 | $2,500

[Center for Responsive Politics, Accessed 3/8/2016]

… Just Days Before (Including $5,000 the Day Before) He Signed a Letter to Director Cordray Urging Him to Use the Florida Model of Regulation of Payday Loans Rather Than Issuing Rules That Do an “Immeasurable Disservice” to Consumers by “Eliminating” Payday Loans That People Use “To Make Ends Meet” …


[Letter to CFPB Director Richard Cordray From Members of Congress, 4/28/15]

 …and a Couple of Months Later He Was Rewarded with $3800 More in Payday Cash

  • Fraser MacKechnie (Amscot Financial) | 6/15/2015 | $2,700
  • Fraser MacKechnie (Amscot Financial) | 6/24/2015 | $1,000

[Center for Responsive Politics, Accessed 3/8/2016]



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