The agency is trying to disrupt the cycle of debt that traps primarily poor people who borrow money from payday lenders, and then have to continue borrowing at exorbitant interest rates because they cannot repay the original debt at the end of the loan period, as vox tells MHProNews.
The Consumer Protection and Choice Act, ironically misnomered, would delay the CFPB’s proposed payday lending regulation by two years, and “nullify its rules in any state with a payday lending law like the one adopted in Florida.”
Wasserman Schultz helped implement rules govening payday lending in Florida as a state representative. A statement issued by her staff reads: “The Congresswoman wants to work with the CFPB on the way forward, and believes the Florida law is an example of how to achieve their shared goals of balancing strong consumer protections with preserving access to credit in underserved communities.”
Criticism of her position came quickly. Ben Norton of Salon said 85 percent of the payday loans in Florida are for people who already have seven or more loans annually, garnering some $280 million in fees. Across the nation, payday lenders take in $3.6 billion in fees from primarily low-income borrowers.
“This latest move by DWS completely undermines the work of the Consumer Financial Protection Bureau, which already is under siege from a number of different directions and will be one of the prime targets of any Republican president also armed with a Republican Congress,” wrote Esquire’s Charles Pierce, who said she should resign her post as head of the DNC.
Jezbel, Bill Moyers and New York magazine all published articles critical of the Congresswoman. Much of Sen. Bernie Sanders’ appeal is his hard-line approach to big business and support for the disenfranchised poor. For CFPB to execute its mission, it needs Democratic support. If Wasserman Schultz succeeds in getting more Democratic support for her position, one of the aims of the CFPB will be crippled. ##
(Photo credit: Getty Images/Andrew Burton–Debbie Wasserman Schultz)
