Payday lenders have donated around $ 2.5 million to Florida politicians and both political parties in recent years, according to new analysis from a liberal group.
Allied Progress has drawn attention to the Florida payday loan issue by attacking U.S. Representative Debbie Wasserman Schultz, the chair of the Democratic National Committee, and other politicians who took money from the industry.
The group gave the Miami Herald an advanced copy of their new report, “A Plan for Florida: How Payday Lenders Bought Florida’s Political Establishment.” The report lists donations made to federal and state candidates as well as to the state’s Republican and Democratic parties since 2009.
Overall, Republicans got $ 1.6 million and Democrats got about $ 890,000, while $ 29,000 went to independents. But the top individual recipients were the South Florida Democrats:
▪ United States Representative Alcee Hastings of Delray Beach: $ 110,700;
▪ Former US Representative Kendrick Meek, candidate for the US Senate in 2010: $ 72,800;
▪ US Representative Patrick Murphy of Jupiter, Senate candidate: $ 51,000;
▪ Wasserman Schultz of Weston: $ 50,600.
The Florida Republican Party received $ 1,083,447 and the Florida Democratic Party approximately $ 366,500.
More than a third of the donations came from the MacKechnie family and their loan company, Amscot Financial, according to the report. (In 1998, Amscot Insurance pleaded guilty to civil racketeering charges and has been banned for life from selling auto insurance in Florida. In return, the state agreed not to pursue criminal proceedings. MacKechnie said his company argued in support of him and the state was wrong, the Tampa Bay Times reported.) Amscot is headquartered in Tampa and has offices across the state of Florida.
“The Florida political establishment pushed Florida’s disastrous model of payday loans to the rest of the country because they were bought up by industry and one family and one company in particular,” said Karl Frisch, director. Executive of Allied Progress.
Payday loans are small, short-term loans that borrowers – who are usually poor – promise to pay on their next paycheck. Florida’s Payday Loan Act was passed in 2001 and included protections meant to help the poor avoid a never-ending cycle of debt.
however, PolitiFact Florida found that consumer groups, independent researchers at Pew Charitable Trusts and the head of President Barack Obama’s Consumer Financial Protection Bureau have raised multiple criticisms of the Florida law. Critics say Florida law leaves customers trapped in a cycle of debt paying high interest rates and lacks protections other states, like Colorado, have added.
The NAACP, La Raza National Council and the Southern Poverty Law Center are among more than 200 groups that have drafted a letter in December in Congress, arguing that “Florida’s industry-backed law” would hurt consumers.
The Federal Office of Consumer Protection published an overview of the country’s proposed troubleshooting rules in 2015 and plans to publish a more comprehensive proposal soon.
This prompted the Florida congressional delegation to back down. Almost all members signed an agreement letter in April 2015, asking the bureau to use Florida law as a model. Many Florida members signed a bill sponsored by U.S. Representative Dennis Ross, R-Lakeland, which would give precedence to state law and delay implementation of federal rules by two years.
The payday loan issue has become a thorn in the side of Wasserman Schultz, who faces her first major re-election challenge since winning the seat in 2004.
In March, Allied Progress ran a TV commercial attacking Wasserman Schultz for his stance on payday loans and then published signposts in his district of South Florida. His main Democratic opponent, law professor at Nova Southeastern University Tim canova, relied on these attacks.
Wasserman Schultz defended his position on payday loans in an April interview with Jim DeFede from CBS4.
“The controversy is very exaggerated,” she said. She advocated for a balance between protecting consumers and maintaining the working poor’s access to capital in payday loan stores.
Wasserman Schultz argued that Bill Ross tells the federal office to “hit the pause button” and let “the other states that don’t have as good protections as we – we certainly could have better – let these states catch up with Florida. “
Wasserman Schultz campaign spokesman Ryan Banfill told the Miami Herald she “fought her entire career in public service to hold unscrupulous payday lenders and others who prey on consumers accountable “. Banfill said that while she was in the state legislature, Wasserman Schultz was part of a bipartisan effort to pass Florida’s payroll law.
Wasserman Schultz is a cosponsor of the Secure Loans Act 2016 introduced in April. Allied Progress hailed the bill as legislation that “would help protect consumers from some of the worst practices of predatory lenders.” The bill has not yet been heard.
The donations she has received from the payday industry are only a small portion of the millions of dollars Wasserman Schultz has raised for his re-election campaigns.
Payday loans could become a topic of the Democratic Senate primary, in which Murphy faces off against U.S. Representative Alan Grayson.
Last year, Grayson signed the joint letter defending Florida’s law, but later said he would oppose the bill introduced by Ross due to the two-year waiting period.
Murphy said in April that Florida’s regulations on the payday lending industry are “stricter than almost any other state.”
PolitiFact Florida has evaluated this claim False.