— NPA (@NPAction) March 1, 2016
Consider this number: $8.2 billion. What could families living in depressed communities around the country do with those dollars?
That is the amount of money that has been sucked out of the pockets of financially struggling Americans in the past year by payday and car-title lenders, using unethical, predatory business practices.
Here’s another stunner: One of the people working to kneecap the federal agency that wants to restrain those practices and help these families keep some of that money is the chair of the Democratic National Committee.
That’s what Campaign for America’s Future alum Zach Carter reported in The Huffington Post, disclosing that the payday loan industry, in its fight against the Consumer Financial Protection Bureau’s efforts to curb the usurious practices of the industry, “has cultivated a powerful new ally in recent weeks: Democratic National Committee Chair Rep. Debbie Wasserman Schultz (D-Fla.).
Wasserman Schultz is co-sponsoring a new bill that would gut the CFPB’s forthcoming payday loan regulations. She’s also attempting to gin up Democratic support for the legislation on Capitol Hill, according to a memo obtained by The Huffington Post.”
Wasserman Schultz, you will recall, had earlier undercut the Obama administration’s effort to win congressional support for the Iran nuclear agreement, siding with right-wing opponents. She has also been widely criticized for orchestrating a Democratic Party debate schedule designed to protect presidential candidate Hillary Clinton from competition in the Democratic primary.
The legislation that Wasserman Schultz has signed onto and is promoting – introduced by Florida Republican Rep. Dennis Ross – would strictly limit how far the CFPB could go in regulating payday lenders, and would especially leave the thriving industry in her home state of Florida pretty much unscathed.
But as a letter sent to Congress by the Center for Responsible Lending and endorsed by groups that include Americans for Financial Reform, the NAACP and National People’s Action, the legislation would still allow lenders to charge effective annual interest rates in excess of 300 percent. That, combined with inadequate controls on repeat loans, keeps borrowers in a cycle on perpetual debt that is profitable for the payday industry but devastating to the borrowers caught in the debt trap.
That’s why this coalition said the legislation that Wasserman Schultz is supporting “is not an effort to reform the payday loan market — it is an attempt to codify industry-backed practices that do little to protect consumers. Low-income consumers deserve strong protections and timely action.”
Wasserman Schultz has a “very progressive challenger” in the Democratic primary for her House seat, Tim Canova, who just posted on The Huffington Post a slashing rebuke of the incumbent.
“Not only is Wasserman Schultz carrying water for an industry that is actively defrauding poor communities out of millions of dollars – one company recently was forced to give $19 million dollars back to customers in illegal overcharge payments – but she is actively convincing Democrats in Congress to do so as well,” he wrote. “Which party does she lead again? Loan sharks should feel right at home in the party of Donald Trump, but con artists should have no place in the Democratic Party.”
Canova poses the question every Democrat has to get right: “We have to decide if we are the party of [Sen.] Elizabeth Warren and the Consumer Finance Protection Bureau [which she helped establish] or Debbie Wasserman Schultz and loan sharks.”
National People’s Action has been pushing for the CFPB to enact strong curbs on the payday lending industry. Learn more and sign their petition at FamiliesCantWait.org