Wasserman Yanks Support for Payday Loan Industry

After intense public pressure and a challenge for her seat from the left, Wasserman yanked her support for the payday loan industry. Within a few hours of the Consumer Financial Protection Bureau, or CFPB, introducing federal rules for the short-term loan industry, Representative Debbie Wasserman Shultz released a statement on Facebook complimenting the agency’s efforts. She wrote, “I stand with the CFPB in its efforts to protect Americans from predatory lending. 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 toward a final rule.”

According to ThinkProgress, Wasserman Schulz has been a major advocate of the short-term loan industry for years. In fact, her support dates back to the time that she spent in the Florida statehouse, which was around the year 2000. Wasserman’s advocacy for the industry didn’t become a political liability until the Democratic leader used her power within the party to encourage other lawmakers to help payday loan lenders avoid regulation.

Several months ago, Wasserman added her name to H.R. 4018. The crafters of this bill designed it to tear apart the CFPB’s regulations before the agency proposed them. She even sent out a memo encouraging other House Democrats to sign the same bill.

The Standard for Regulating the Payday Loan Industry

The intent of H.R. 4018 is to diminish the CFPB’s rules. According to the bill, regulations established by the CFPB should not supersede the ones enacted by the nation’s states. Leading champions of the bill have argued continuously that Florida’s payday lending regulations are the standard for legislating the payday loan industry. Critics argue that the state’s laws are not as good as supporters claim. The data shows that Florida consumers pay twice as much to borrow funds as Colorado consumers. The state of Colorado allows payday lending, but its rules are stricter than the laws in Florida.

Wasserman’s recent statement seems to be an attempt by the lawmaker to conceal her recent history of working to obstruct the CFPB’s regulations. However, she is still a co-sponsor of H.R. 4018 even though the bill is currently stalled at the committee level and is likely dead. Theoretically, lawmakers could revive the bill later in the year and use it to go after the agency and its rules.

Earning the Nickname “Debt Trap Debbie”

Between co-sponsoring a bill designed to block new legislation against the short-term lending industry and the tens of thousands of dollars donated to her campaign by these types of lending companies, news organizations have started calling Wasserman “Debt Trap Debbie.” Her opposition to the new rules along with the donations have given her primary challenger, Tim Canova, a way to show voters how his positions differ from hers.

Bernie Sanders Aids the Challenger

Not only does Wasserman have to worry about regaining the trust of her constituents, but she is also dealing with a primary challenger who has the backing of Bernie Sanders. Tim Canova is the first challenger that Wasserman has had to face. Because of this, his odds of winning the primary are slim, but the support of Sanders has clearly caused the lawmaker to rethink how she is handling her political career.

In a statement, Canova said, “This is a direct response to our campaign. We have spent the last five months exposing our opponent for putting the wants of her corporate donors ahead of the needs of working Americans here in South Florida.”

The Observer confirmed that even Senator Elizabeth Warren took a few shots at Wasserman following reports of the legislator’s support for H.R. 4018. Warren hit her again when the CFPB’s announcement about its proposed set of rules against the payday loan industry came out.

Wasserman’s sudden change of position speaks to the power of Bernie Sanders and Elizabeth Warren. Their comments combined with intense media pressure has clearly caused Wasserman to worry enough about her career to join those who are against payday lending. Without the added heat, it’s likely that she would have continued to support the short-term loan industry.

Voters are Starting to Hold Elected Officials Accountable

The Bernie Sanders campaign appears to have altered the political landscape indefinitely by inspiring voters. People are starting to hold elected officials accountable when they take action to aid big business instead of everyday people. Wasserman’s decision to pull her support for the payday loan industry shows that she is aware of the nation’s attitude change. To learn more about Wasserman’s decision, visit the PersonalMoneyStore.com.