A lot of Internet journalists and bloggers like to give Florida a hard time. The Sunshine State certainly has its share of eccentric characters and unique settings. However, when it comes to payday loans, Florida may be one of the most progressive and on-the-spot states in the entire United States. As you probably know, the Consumer Financial Protection Bureau has been on a mission as of late to severely over-regulate the payday lending industry. Congress has finally wizened up to the new proposals from the CFPB, and one Florida Congressman has some harsh words for the proposed federal regulations that the CFPB is trying to push through.
Representative Alcee Hastings has been on a mission to raise concerns about the strict, new regulations that the CFPB has officially proposed over the past few months. Hastings believes that the federal laws would supersede the lending rules that are, by all accounts, working very well in Florida. Hastings says that the new laws could cut of short term credit for the working poor of his state; those folks who cannot get help from traditional banks when they need immediate financial assistance to get by from one paycheck to the next. The CFPB, for its part, states that it has a goal to stop customers from being forced to pay “exorbitant” loan fees, which the bureau says puts poor Americans into a cycle of never-ending debt. The payday lending companies warn that nearly 70 percent of their locations could wind up out of business if the new CFPB proposals are put into action.
Mr. Hastings passionately outlined his concerns during a speech he gave in front of the National Urban League Conference earlier this summer. He suggests that the federal government is introducing a dangerous double standard with regards to the problems that payday lenders faced compared to the bailouts that big banks got during the last great financial recession. He warned that this double standard would leave working class poor Americans in harm’s way if the local lending companies were to be forced out of business.
“Payday lenders have been described by many of us, and many of you, and some in the administration, as predators,” Hastings told the crowd. “I want to remind you of something. When Ms. Lillie’s or Ms. Lizzie’s or Mr. Johnson’s lights are about to be turned off, regrettably they can’t go to Wells Fargo or to Bank of America for a loan. So they go to the local loan company and then we criticize those local loan companies. And I will remind you, and I was there, when the then Treasurer of the United States walked in and said that we were about to go under. And we talked about banks too big to fail. Well, it was not the little loan companies that damn near brought this country down. It was the big banks that did that, and don’t you forget it.”
Mr. Hastings is no stranger to this struggle, as he led the Florida congressional delegation in their fight against the CFPB’s regulations, which would essentially pre-empt the successful system that they have already created in the Sunshine State. It is encouraging to see elected officials realizing what a huge stake that they have when it comes to the new proposals from the CFPB. And by exposing the double standards that exist, maybe Hastings will get some much needed support from other concerned government representatives in the near future.
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