Florida's payday lender law is no model, report concludes
Florida regulations of payday lenders defended by Reps. Debbie Wasserman Schultz, Patrick Murphy and others have cost poor Floridians more than $2.5 billion in fees over the last decade, according to a new study.
“Our analysis shows that the law has done nothing to stop the debt trap,” said Brandon Coleman, co-author of the report and counsel for the Center for Responsible Lending. “With 83% of payday loans going to people stuck in 7 or more loans per year, it’s easy to see how Florida’s law is failing consumers.”
The 2001 law has come back into view as a bill in the U.S. House seeks to block new regulations under the Consumer Financial Protection Bureau. Wasserman Schultz has gotten hammered by liberal groups for pushing the bill, which prevents any changes to payday lenders for two years. It could also emerge as an issue in the U.S. Senate race, with Patrick Murphy joining Wasserman Schultz’s side and Alan Grayson opposing the bill.
Both Wasserman Schultz and Murphy, along with Rep. Alcee Hastings, are among the top recipients of campaign donations from the industry.
The report today was issued by the Center for Responsible Lending, National Council of La Raza, Latino Leadership, Inc. and the Florida Alliance for Consumer Protection.
“The persistent pattern of repeat lending in Florida occurs despite the 2001-enacted Deferred Presentment Act, a state law that limits borrowers to only one loan at a time and includes a 24-hour wait period between loans. Passed with bipartisan support in the legislature along with that of the payday industry, today payday lenders in Florida are more commonplace than Starbucks’ 642 coffee shop locations and charge on average 278% annual percentage rate (APR),” reads a release.