The Chairperson of the Democratic National Committee Debbie Wasserman Schultz decided to no longer back the payday loan industry and support instead a new set of federal rules protecting consumers.
Earlier this week, Wasserman was attacked by a consumer rights group for her stance on payday lending also known as legal loan sharking. Activists created a short ad depicting the congresswoman stance on the issue.
On Tuesday, Wasserman criticized the ad for being distorted although the small clip had used her own words used in an interview. Back then, the congresswoman said that poor people’s only choice was to have a sure source of payday loans. She added that it was crucial to help those people “have short term access to capital.”
But actions speak louder than words as she has backed a bill in Congress which tries to postpone the federal regulations that may restrict payday lending. On Friday, however, she completely switched her stance on the issue.
She recently said that she was on the Consumer Financial Protection Bureau’s side on that one. She added that the new rules will shield Americans from “predatory lending.” So she assured the CFPB and consumer groups of her full support in drafting the new regulation.
She even hailed the new rules for the tight oversight over the controversial practice.
Yet just a few months ago, she had viewed her home state’s lax payday loan legislation as a “model” for the entire U.S. And the CFBP’s new rules will be much tighter than Florida’s.
The payday loan industry in the Sunshine State is now able to charge its clients 400 percent interest rates. This is why many customers cannot pay off their debt so they turn to more loans which trap them into a never-ending spiral of debt.
One of Wasserman’s critics deemed her recent move a “big flip flop” caused by her realization that she had no chance of protecting the ‘indefensible.’ Other critics have criticized the congresswoman for taking big money from the payday loan lobby groups.
Tim Canova, the politician’s first challenger in the primary election, noted that Schultz was an “insider” gorging on corporate money. Canova, who is backed by Democratic presidential hopeful Bernie Sanders, sees Wasserman as a very Hillary Clinton-like character.
Wasserman couldn’t be reached for comment Friday.
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