It has always been a bit of a curiosity that payday loans – the only lifeline available to working class people the banks and credit card companies won’t help – are staunchly opposed by many Democrat politicians.
The Dems want to be the voice of the 99% right? They claim to represent the voiceless and make government help all Americans. But if that is the case, why fight against payday lenders so forcefully? These same politicians who fight private lending usually take great amounts of campaign contributions from large banks and financial institutions. And that is about as far away as “fighting for the little guy” as a politician can get!
So it is a major story when the news broke that Representative Debbie Wasserman Schultz (Democrat, FL) is co-sponsoring a Republican backed bill to delay the attack plan of the government agency the CFPB to put the payday loan industry out of commission. Some Dems are shocked at her actions, and are denouncing her decision… but perhaps the Florida Representative is actually fighting the good fight and standing up for her constituents.
Payday Rules: States Rights
Rep Wasserman Schultz’s home state is one of many that has its own rules and regulations for private lending. Florida has, and has had for quite a while, a set of strict guidelines regulating the lending industry. And so what this really comes down to is this – she is not fighting for the rights of payday lenders so much as she is standing up for States Rights.
The federal government and the CFPB want to overstep their bounds and create nation-wide regulations for payday lending, but Wasserman Schultz is saying “Florida governs itself, we don’t need your rules to override our rules.” It’s quite simple, really: why should the Fed step in and take over when Florida does not have a problem?
And her point is being felt all across the country. Virtually every state has its own rules regulating private lending. Some states are very lenient, others do not allow payday loans at all, but each and every state has its own lawmakers that oversee the financial transactions of that state. What the CFPB is proposing is that the federal government steps in, overrides all existing laws, and takes over.
Does this mean Rep Wasserman Schultz has joined the GOP in a fight against the spread of Big Government? No, not exactly.
The CFPB: Federal Control
What the Florida Representative really did was to co-sponsor a bill that would force the CFPB to slow down and take their time in establishing their rules and regulations.
That’s right – the federal government is pushing forward with taking over all private lending regulation before they even have their rules written! So when Wasserman Schultz moves to force them to slow down, she is not really “fighting” against payday loan restrictions, she is simply making the agency actually write and establish their rules before making them law.
This is more of a common sense issue than a political one. Big Government wants to step in and regulate an entire industry into extinction, and they want the power to do it RIGHT NOW even though they don’t have their guidelines and rules completed. Handing such overriding power to the CFPB with so little oversight is a smart move, no matter the politics involved.
Representative Wasserman Schultz has been called a “high profile ally” to the payday loan industry, but that does not seem to be the case. She is simply a woman taking a stand against the over-reach of government. And for that, she deserves respect.