The payday loan industry is suing to block a Consumer Financial Protection Bureau rule less than a month after the industry used the rule as an excuse to drastically expand its loans in Florida.
The federal lawsuit, filed in Texas by the Community Financial Services Association of America, says the CFPB rule is "draconian" and would "virtually eliminate" the payday-lending industry, according to the Washington Post.
But that's the excuse payday lenders used to convince legislators this year to change Florida law, the first significant expansion of the industry since it was allowed to operate in the state in the early 2000s.
The new law, which takes effect next year, skirts the rule by allowing the industry to offer loans that are twice as large and carry fees that are also potentially twice as large.
If the industry wins its suit, the result would be a gift to companies like Tampa-based Amscot, the state's largest payday lender: It could offer much larger loans without the nuisance of the consumer protection rules.
Amscot led the charge to change the rule this session, even flying in pastors on private jets to lobby on their behalf.
The company's founder is also on the board of the Community Financial Services Association of America.
Amscot said in a statement that it was "just one among hundreds of members from 30 states" that make up the trade association.
"As we have stated before, Amscot appreciates the hard work of Florida legislators and Gov. Scott for enacting an effective law that will benefit countless Florida consumers," the company said. "This new Florida law does not alter the harmful path taken by the federal agency, and the association's lawsuit has been in the works for years."
It's highly unlikely the Legislature would roll back the law next session. This year's bill passed with bipartisan and overwhelming support.