This is probably a fight that Debbie Wasserman-Shultz wishes she hadn’t stepped in on.
The Consumer Financial Protection Bureau recently unveiled new rules to curb Payday Lenders abilities to become loan sharks by requiring them (among other measures) to limit on how frequently borrowers can get payday loans as well as requiring that lenders verify that people can repay the money without taking on new debt, avoiding the so-called debt trap.
These new rules didn’t sit well with some Republicans and Florida Republican Rep. Dennis Ross introduced legislation in the House to curb them.
And for some reason DNC Chairwoman Debbie Wasserman-Shultz decided to join them.
Not one to back away from a fight that protects average consumers, Senator Elizabeth Warren stepped into the fray, voicing her opposition to the legislation at a Senate Banking Committee hearing in April:
“When emergencies arise people need access to credit, but payday lenders that build business models around trapping people in a never-ending cycle of debt are throwing bricks to a drowning man,” Warren said.
Wasserman-Shultz, who is facing her first primary fight since joining the House (from progressive Tim Canova) and is still busy running the DNC, probably doesn’t need to draw the ire of the Warren wing of the Democratic Party at this time. In an interview with CBS Miami the Congresswoman said:
“Payday lending is unfortunately a necessary component of how people get access to capital that are the working poor. I trust that the CFPB regardless of whether this bill becomes law will ultimately do what’s right, and I will support whatever they decide.”
As someone who once relied on payday lenders to get me through a rough financial period, I’ve seen first hand what their lending practices can do to a person. There’s no more demeaning feeling than to have to take out a loan to pay off the same lender that you're borrowing from.
If DWS knows what’s best for her political career (and for the DNC), she should drop her support for this legislation like a hot rock.