New legislation could give Florida payday lenders their money’s worth
Inside Subprime: March 6, 2018
By Andrew Tavin
New legislation regarding payday loans passed the Florida Senate last Saturday and looks poised to pass through the House as well. As reported by the Palm Beach Post, the bill, known in the Florida Senate as SB 920, would double the amount payday lenders can lend out from $500 to $1000, and extend lending terms from 7-30 days, to 30-90 days.
Payday loans in Florida tend to have very short payment terms and very high interest rates, which often have the effect of forcing borrowers into a spiral of debt. That’s why legislators and organizations like the Consumer Finance Protection Bureau (CPFB) have sought to regulate the products these kind of lenders offer. But with the CFP’s power withering under Mick Mulvaney’s “leadership” and the Trump administration stepping back from enforcing payday loan regulations, there might be a lot less oversight in the years to come. This bill was created in response to a call for regulations from the CFPB, and if passed through the House, it would create an entirely new category of payday loans, one which won’t fall under the proposed CFPB regulations.
We’ve written before about how these new Florida payday loan laws will likely increase the ability of predatory lenders to target the elderly. So why, with so much risk of abuse, are lawmakers getting ready to let Florida payday lenders run wild? The Palm Beach Post suggests around 8 million reasons why that might be the case.
Specifically, the more than $8 million that payday lenders have spent lobbying Florida politicians since 2007. The Florida Republican Party has received the largest portion of that money, with over $1.1 million in donations. But the Florida Democratic Party hasn’t exactly been shutting their doors to payday lenders either, having accepted over $400,000 dollars from lobbyists whose job it is to further the payday lending cause. Among individual politicians, the three biggest recipients were all Republicans, with over $10,000 in donations each.
Of course payday lenders claim the removal of regulations will allow them to better serve their client’s needs. However, given how vulnerable their consumers tend to be, the possibility for abuse is always going to be present unless the kind of regulations that are being repealed are kept in place and expanded.
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