Florida lawmakers seek payday industry’s approval on legislation
Inside Subprime: March 23, 2018
By Alex Huntsberger
When the Consumer Financial Protection Bureau announced their new rules for payday lenders in the fall of 2017, it seemed like Florida payday lenders may be in trouble. Among other restrictions it put on high-cost, short-term loans, the CFPB’s proposed rule would have prevented payday lenders from lending to anyone who had taken out six or more loans in the space of a year.
The Bureau estimated that this would eliminate up to 62 percent of all payday loans issued. But as Ian MacKechnie, the founder and CEO of Tampa-based payday lender Amscot put it to the Tampa Bay Times, “It might as well be 100 percent.”
“Nobody’s going to be around,” he added. “It puts us out of business.”
Luckily for MacKechnie and his industry brethren, the Florida Senate passed a bill last year that allowed them to offer a new kind of product, one that circumvents the CFPB proposed regulations.
Right now, payday lenders in Florida are allowed to lend up to $500 at a maximum rate of $50 per loan and repayable in 30 days. This bill would let payday lenders offer up to $1,000 for a 60 to 90-day installment loan, at a maximum rate of $216.
In response to the CFPB attempting to protect payday loan customers, Florida lawmakers have decided to make payday loans more than twice as expensive.
It’s not surprising, then, that Florida payday lenders were closely consulted in the drafting of this bill. In fact, according to a recent article in the Tampa Bay Times, payday loan CEOs and industry lobbyists were given the power to approve changes by lawmakers and their staff.
The article reports an email thread on which MacKechnie and other powerful industry players were sent updated versions of the bill by a Florida House employee in order to seek their approval. The article goes on to note that opponents of the bill were not consulted in such a fashion.
Although the bill soared through the Senate, it still has to pass the Florida House. However, the bill is expected to pass with flying colors, as it has received almost not opposition from members of either political party. Since the early 2000’s, the payday lending industry has donated over $3 million to state politicians.
Check out these related pages and articles from OppLoans:
- THE FLORIDA SUBPRIME MARKETPLACE: TITLE AND PAYDAY LOANS IN FLORIDA
- Jacksonville Subprime Report
- Miami Subprime Report
- Tampa Subprime Report
- Payday Loans: The Most Dangerous Debt Trap