A law professor who runs against US Rep. Debbie Wasserman Schultz of South Florida says she’s in the pockets of the big banks and not looking for consumers who are crushed by payday loan debt.
“My opponent, after taking hundreds of thousands of dollars from Goldman Sachs and other Wall Street banks, voted to prevent the Consumer Financial Protection Bureau (CFTP) from regulating payday lending and fighting discrimination racialism in auto loans, “said Tim Canova on his website.
Canova, a first-time candidate and professor at Nova Southeastern University, challenges Wasserman Schultz in the August Democratic primary in a Broward / Miami-Dade district. The race gained national attention because Wasserman Schultz is the chairman of the Democratic National Committee.
Did Canova accurately describe its bank donations and votes related to payday loans and auto loans?
There is some truth in his attack, but each one needs explanation.
Donations from Wall Street Banks
Canova’s campaign highlighted donations from banks, securities / investment firms, and finance / credit companies to Wasserman Schultz’s campaign committee and his Political Action Committee, or PAC.
At the request of PolitiFact Florida, the Center for Responsive Politics compiled large individual donations (over $ 200) and donations to her PAC from her 2006 election. The center discovered that she had received $ 309,020. commercial banks, which represented about 2% of the total; $ 408,450 from securities / investment companies and $ 325,850 from finance / credit companies.
Wasserman Schultz spokesman Sean Bartlett highlighted donations only to his campaign and extracted what he called donations from the “big bank.” This totaled $ 15,400, including $ 4,000 from Goldman Sachs.
But the Center for Responsive Politics has a longer list of bank donations even though we’re only looking at its campaign committee. This shows $ 171,303 for “commercial bank” industry donations.
Payday loan invoice
Payday loans are small, short-term loans that borrowers promise to repay on their next paycheck. high rate of interest. It is a controversial industry that targets the poor and is disproportionately located in minority communities.
For years, payday loans were not regulated by the federal government, although some states had their own laws.
President Barack Obama took a step towards regulating the industry when he signed a bill in 2010 that included the creation of the Consumer Financial Protection Bureau. Republicans have targeted the office for years.
Get some Democrats in the fray – including Wasserman Schultz, who got about $ 68,000 from payday lenders, according to the Center for Responsive Politics.
Wasserman Schultz is among Florida lawmakers who have defended Florida’s payroll law despite some consumer advocates criticizing it and saying it traps the poor in a cycle of debt. Wasserman Schultz’s position is to put state law first, his spokesperson said.
At the federal level, the office issued a payday loan rules overview in March 2015 and is expected to announce a more comprehensive proposal in the coming months. Congress does not have to approve him but can introduce legislation to kill him.
All but one of the Florida congressional delegation (Tom Rooney) signed a letter in April 2015, pushing back the proposed rules. Instead, they want the office to see Florida law as a model.
This led US Representative Dennis Ross, a Republican from Florida, to table the Consumer Protection and Choice Act, RH 4018 in November. Half of the 24 cosponsors are from Florida, including Wasserman Schultz, and nine of the cosponsors are Democrats.
Canova’s website said Wasserman Schultz “voted” on the bill, but was only referred to a committee without a vote. (After we reported this to Canova’s senior advisor, Richard Bell, the campaign changed the website to say “co-sponsored” instead of “voted”.)
The bill states that if the office determines that a state’s law meets federal requirements, only state law will apply. It would also delay federal regulations by two years, allowing states to come up with their own laws.
More than 200 consumer or civil rights groups – including the NAACP, La Raza National Council, the Southern Poverty Law Center, and the Consumer Federation of America – have written a letter in Congress urging them to defeat the bill. They argued that the bill promotes an “industry-backed Florida law” and would hurt consumers.
The Florida Payday Loan Act of 2001 was a compromise and included protections meant to help the poor avoid a never-ending cycle of debt. But the loans leave consumers stuck on a debt conveyor belt in Florida, where they have racked up $ 2.5 billion in fees since 2005, according to the Center for Responsible Lending’s March. report. Over the past year, the average Florida payday loan had an annual rate of 278%.
Richard Cordray, head of the Consumer Financial Protection Bureau, challenged Ross’ description of Florida law as “the gold standard” during a congressional hearing on March 16.
In Florida, “these loans are always made above 300%, and they are renewed on average nine times”, Cordray noted.
Bartlett argued that Wasserman Schultz fought against “abusive payday lending practices” and highlighted her vote on a separate bill in 2015. She voted against HR 766, the Financial Institution Customer Protection Act, which, according to opponents, would have prevented the Justice Department from going after the financial industry.
Racial discrimination in auto loans
Canova also said that Wasserman Schultz had blocked any action to end racial discrimination for car loans. This part of Canova’s attack concerns a Bulletin 2013 of the Consumer Financial Protection Bureau, which recommended measures for auto lenders to avoid discrimination. The purpose of the bulletin was to clarify the law in force.
But the House of Representatives pushed back against the office by passing a bill to cancel the ballot. The bill was passed by House 332-96 in November 2015 and did not receive a vote in the Senate. Wasserman Schultz was one of 88 Democrats who voted for him, while 96 Democrats opposed.
“This legislation has by no means prevented the CFPB from tackling racial discrimination in auto loans, and the MP does not support this as a political position,” her spokesperson said.
The bill has not been implemented and discrimination investigations can continue. A few months after the House vote, Toyota agreed to a $ 21.9 million settlement to black and Asian buyers.
Canova said Wasserman Schultz “after taking hundreds of thousands of dollars from Goldman Sachs and other Wall Street banks, voted to prevent the Consumer Financial Protection Bureau from regulating payday lending and fighting discrimination racialism in auto loans “.
His campaign committee and the PAC have taken $ 309,020 from commercial banks since his re-election campaign in 2006, or about 2% of the total. This includes $ 15,000 in donations from Goldman Sachs to its leadership PAC.
The payday loan bill has yet to be voted on in the House, although Wasserman Schultz is one of the co-sponsors. The bill wouldn’t stop the bureau from fully regulating payday loans, but it would hand power over to states, including Florida, which has its own payroll law that some advocates have criticized as weak.
She voted for a bill that crushed office guidelines that sought to clarify the law on racial discrimination related to auto loans.
We rate this statement to be quite true.