Sketchy payday loan sharks, whose short-term, high-interest loans trap millions of Americans in a cycle of debt, have a new ally on Capitol Hill—Democratic National Committee chair Debbie Wasserman Schultz, who is reportedly pushing a bill that would "gut" forthcoming industry regulations.
According to a memo seen by the Huffington Post, Rep. Wasserman Schultz (D-Fla.) is co-sponsoring legislation (pdf) to delay new rules from the Consumer Financial Protection Bureau (CFPB), meant to crack down on abusive payday lending that profits off deceptive terms, automatic "rollovers," staggering fees, and interest rates averaging over 300 percent annual percentage rate (APR).
The so-called "Consumer Protection and Choice Act" would delay those rules for two years and "permanently block them in any state that enacts the sort of ineffectual, industry-crafted regulatory sham that Florida adopted in 2001," ThinkProgress reports.
In December, 265 civil rights, labor, and consumer advocacy groups signed onto a letter opposing the legislation, which they decried as "an attempt to codify industry-backed practices that do little to protect consumers."
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
In backing the bill, the HuffPo notes, Wasserman Shultz is aligning herself with the Republican Party, which has "assailed the agency from every conceivable angle—going after its budget, attempting to tie its hands with new layers of red tape, fomenting conspiracy theories about rogue regulators illegally shutting down businesses and launching direct attacks on payday loan rules themselves."
She is also going against public opinion. A poll conducted last year for Americans for Financial Reform and the Center for Responsible Lending, showed that nearly two in three voters have a negative view of payday lenders. The same survey showed that respondents viewed payday lenders as predators rather than resources by a margin of more than 3:1.
The move also puts Wasserman Schultz—who has come under fire for the DNC's perceived pro-Hillary Clinton bias—at odds with U.S. Sen. Elizabeth Warren (D-Mass.), who conceived of and established the CFPB and who has denounced payday lending schemes for targeting the poor.
As Eric Levitz of New York Magazine's Daily Intelligencer said Tuesday—his tongue firmly in his cheek: "With such brave legislators leading the Democratic Party, it’s difficult to understand how Bernie Sanders can get so mad at the 'Establishment'."
