One of the biggest Democratic themes of the 2016 election is “building on President Obama’s legacy.” It has come from many establishment Democrats during the 2016 primary season. Even Debbie Wasserman Schultz has used this theme in a statement released by her office, and she isn’t even running in the primaries. This all makes it rather strange that with this in mind, Wasserman-Schultz has decided to help Republicans to destroy a very popular Obama-created governmental office of which he is very proud and voters absolutely love.
The Consumer Financial Protection Bureau, which was set up by Elizabeth Warren after President Obama personally appointed her to do so, is coming under heavy attack by the ultra-predatory payday lending industry. The industry is also enjoying the assistance of Republicans and a few Democratic sellouts – which now includes Wasserman-Schultz among their number.
The CFPB is approaching a point where they are going to be able to adopt better rules to protect consumers from predatory lending practices, which disproportionately harm the poorest among us and can throw an otherwise financially stable family into a long and sometimes inescapable cycle debt. This has caused the industry to rally Republicans to assault the CFPB by attacking its budget, burdening it with impossible amounts of regulation, and creating outright lies about the agency unilaterally shutting down businesses.
Wasserman-Schultz is co-sponsoring a new bill that would completely gut the CFPB’s approaching payday loan regulations and she is trying to lobby other Democrats in Washington to join her in this unprecedented attack on the poorest and most vulnerable Americans.
The upcoming Republican sabotage is wrapped in a misleading name, the “Consumer Protection and Choice Act.” What exactly it has to do with protection and choice is not clear, since it actively blocks protections and poor people who are in desperate need tend to have no choice when it comes to resorting to a payday loan. The legislation would delay the CFPB’s new regulations by two years, and would allow for state-level nullification of their federal authority in states that adopted their own laws regarding payday lenders. It’s important to note that it doesn’t have any classification for a level of protection of consumers – only that the state has adopted “a law” regarding payday lenders. It could be a mostly anti-consumer measure, but if it fulfills the letter of the law it would make it literally impossible for the CFPB to help an entire state.
The Consumer Federation of America, the NAACP, The National Consumer Law Center, The National Council of La Raza, The Southern Poverty Law Center, and dozens of others sent letters to every member of Congress urging them to oppose the law. This isn’t an online petition by regular people on some website. These are some of the biggest progressive social justice movements in America.
A typical Florida payday loan customer takes out 9 loans per year and is stuck in debt for almost half that year. The average interest on Florida payday loans is 304 percent, which is less than the national average but still huge.
Wasserman-Schultz is partially reacting to a state-level law she helped create in Florida, that her office claims “sharply reduced” the need to go after bad actors, curbed predatory practices, and created standards and protections for low-income borrowers.” The problem with this is, it simply isn’t true. 76 percent of payday loans are “turned,” which means that they are made to help the borrower pay off a previous payday loan. This is exactly what the CFPB wants to help stop – a cycle of debt that the poor can’t escape where they need to keep taking out loans to pay off previous ones.
Debbie Wasserman Schultz is quickly becoming a pariah among Democrats. Her management of Democratic primary debates has garnered her a fair amount of infamy, and many have been calling for her to resign from her position as DNC chairperson. She will also be facing a primary challenge for her seat in the next election cycle. With this latest assistance to Republicans, will it mean the end of her seat at the DNC as well as in Congress?
Featured image via Flickr