Payday lenders are some of the most predatory and parasitic companies in America – preying on the poor, uneducated, and unbankable. Those using payday lending services can face astronomically high interest rates on loans, interest rates they would be less likely to face at a traditional financial institution, in many cases because such predatory behavior is banned by law.
Because of that predatory behavior, payday lenders are often opposed by consumer advocates and government regulators who try to stop (or at least mitigate) the deleterious effects payday lenders cause when exploiting poor communities, especially communities of color.
Not surprisingly, the new Consumer Financial Protection Bureau (CFPB) has been making efforts to rein in payday lenders. Those efforts have, up until recently, been fiercely opposed almost exclusively by the payday lending industry and their allies in Congress, which are typically Republicans.
But payday lenders now have a new champion in Congress, Chairman of the Democratic National Committee (DNC) Congresswoman Debbie Wasserman Schultz (D-FL)
Congresswoman Wasserman Schultz is co-sponsoring legislation that “would delay the CFPB’s payday lending rules by two years, and nullify its rules in any state with a payday lending law like the one adopted in Florida.” The law in Florida has been a dud and has not stopped the predatory nature of the payday lending business. Which, of course, was the point, as the bill was written with the industry in mind [PDF].
With a strong federal regulator like CFPB on the scene, the industry wants to change the venue of the battle and, correctly, sees state fights on predatory lending as easier to win. This is a common tactic among many problematic businesses and one of the reasons Big Business has so strongly backed organizations like the Federalist Society, which try to devolve regulatory jurisdictions to the state and local level where big transnational corporate money can have an even larger impact.
Wasserman Schultz accepted $12,500 in donations from the payday lending industry in 2012.
Despite claims of objectivity, Wasserman Schultz’s reasonably-perceived favoritism towards Hillary Clinton has already irritated many people in the Democratic Party. The party’s dismay has even prompted a primary challenge from Democrat Tim Canova. Shilling for the payday lending industry may gain her campaign contributions, but is unlikely to further endear her to progressives.