Prominent Democratic Leaders Face Off Over Payday Loan Industry Regulations

Prominent Democratic Leaders Face Off Over Payday Loan Industry Regulations

You don’t have to be a fan of professional wrestling or boxing to enjoy a good rumble. As a matter of fact, the political arena often offers up some of the most interesting battles that take place. For example, currently two of the most prominent leaders of the Democratic Party are going toe-to-toe over paydaAnti-Malwarey loans. If you are not familiar with payday loans, they are short term, smaller dollar loans. People take out these types of loans – often to take care of unexpected expenses – and then pay them back when they get their next paycheck.

The payday lending industry has been under fire from some leaders, like Senator Elizabeth Warren. She is throwing her support behind the Consumer Financial Protection Bureau’s (CFPB) new regulations. These regulations will put serious restraints on how the payday lending industry operates. On the other side of things, but on the same side of the aisle, is Warren’s competition – The Democratic National Committee Chairperson, Debbie Wasserman Shultz. She believes that Florida’s established, but more permissive regulations offer a good path to follow, and has co-sponsored new legislation that would effectively pre-empt the new rules from the CFPB.

Wasserman Shultz has put efforts into becoming part of a bipartisan House group. Half of the members of this group represent Florida districts and are moving toward the support of a bill that would prevent the CFPB from handing down new payday lending industry regulations, for at least the upcoming two years. The CFPB is probably going to propose their new rules by the end of spring, and those rules would put caps on loan rollovers and require lenders to do a lot of work on every loan to make sure that borrowers are able to pay back the loans they take out. Warren has gone on record and posted to Twitter that she is against the legislation that the bipartisan group is supporting.

This bill has been getting a lot of attention in recent weeks. It all started when a group called Allied Progress started running ads that put a lot of heat on Shultz. She represents the 23rd district in Florida. Allied Progress has alleged that Shultz has received about $68,000 from the short term lending industry, and have even implied that those funds have resulted in the Democrat supporting the new bill.

Tim Canova is a challenger of Shultz’s and told a publication that the bill is “terrible litigation. He suggested that he was confused as to how some lawmakers could believe that Florida’s rules for payday lending are best practice that should be used as a national model. The fact of the matter is, though, that about every member of the congressional delegation in Florida has expressed serious concerns with the proposed rules from the CFPB. Back in 2015, 26 of the 17 Florida House members showed support for Florida’s payday rules and touted them as “… the most progressive and effective in the nation.”

These House members wrote, “To ignore our experience, which has proven to encourage lending practices that are fair and transparent without restricting credit options, would do an immeasurable disservice to our constituents.”

It is not all that often that we get to see such a high stakes battle being fought between members of the same political party. Wasserman Shultz seems primed to stick to her guns on this one, and Warren does not have a reputation for backing down. Both have supporters that have their back, but all parties involved need to think of what is best for American consumers in order to conclude this political battle in a way that is best for the most important people involved – the American consumer!

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