Wasserman Schultz reverses opposition to new payday lender rules
Rep. Debbie Wasserman Schultz on Friday became the second Florida Democrat to back away from opposition to new payday lender rules pushed by the Consumer Financial Protection Bureau.
In a statement, Wasserman Schultz said, "it is clear to me that the CFPB strikes the right balance and I look forward to working with my constituents and consumer groups as the CFPB works towards a final rule.”
Her support of a bill to delay the new regulations was a source of controversy, drawing TV ads from a liberal group that called her "Debt Trap Debbie." It also put her opposite President Obama, Elizabeth Warren, Hillary Clinton and other advocates of a crackdown on the lenders.
The proposed rules were published Thursday. Rep. Patrick Murphy, a candidate for U.S. Senate, also retreated from the House bill, which held up Florida regulations as a model.
“As a strong supporter and partner of the Consumer Financial Protection Bureau in Congress, I stand with the CFPB in its efforts to protect Americans from predatory lending," Wassserman Schultz said. "From the outset of this process, I have said that I trust the CFPB to do what’s right for consumers, and these proposed rules are an important step towards that critical goal."
“I am pleased that the proposal includes lender reporting requirements to track loans and assess each borrower’s ability to repay. Florida has tracked loan data for over ten years and it has been pivotal in protecting consumers and helping to end the cycle of debt for many. The CFPB proposal also curbs the abusive lending practice of repeatedly attempting to withdraw funds from consumers’ accounts. This practice results in heavy overdraft fees for borrowers, and I support the CFPB’s plan to help rein it in and preserve access to credit without the burden of unexpected costs.
“After reviewing the proposed rule, it is clear to me that the CFPB strikes the right balance and I look forward to working with my constituents and consumer groups as the CFPB works towards a final rule.”
Allied Progress, which ran ads against Wasserman Schultz, declared victory. “This is a wake-up call for progressives in Congress and every state legislature around the country. Getting in bed with the payday lending industry isn’t only bad policy, it’s bad politics,” said Allied Progress executive director Karl Frisch. “Now that both Patrick Murphy and Debbie Wasserman Schultz have endorsed the CFPB’s proposed rule to rein in predatory payday lenders, we can say without hesitation that the push to spread the disastrous ‘Florida model’ of payday lending nationally is dead. Anyone who thinks this effort is still a viable alternative to the CFPB’s proposal without the continued support of its two most influential congressional backers is delusional.”