WASHINGTON -- Democratic National Committee Chair Rep. Debbie Wasserman Schultz (D-Fla.) has been working to gut new rules intended to rein in predatory payday lending. Her fellow Democrats don't seem pleased.
Allied Progress, an activist group headed by the longtime liberal operative Karl Frisch, is airing a new ad in Florida hammering Wasserman Schultz's efforts to undermine the regulations. The ad assails Wasserman Schultz -- the nominal head of the Democratic Party -- for teaming up with Republicans to defeat a policy backed by President Barack Obama.
Watch the ad below:
The Consumer Financial Protection Bureau is expected to present a final set of payday lending regulations in the next few weeks. The idea is to prevent lenders from trapping borrowers in a vicious cycle of debt, in which borrowers take out a loan expecting to pay a one-time fee, but end up taking out several more loans when they are unable to make ends meet at the end of the loan period.
Wasserman Schultz is trying to gin up support on Capitol Hill for a bill that would nullify the CFPB's rules in states that adopt payday loan rules similar to those in her home state. The Florida law is supported by the payday loan industry and has not prevented lenders from preying on the poor. The CFPB's regulations would be stronger, but Wasserman Schultz is seeking to block them.
More than three-fourths of payday loans issued in Florida are so-called "turned" loans that borrowers take out to help them pay off a previous loan, according to Americans for Financial Reform. The average annual interest rate on a Florida payday loan is over 300 percent, according to data compiled by the Pew Charitable Trusts.
"The Congresswoman wants to work with the CFPB on the way forward, and believes the Florida law is an example of how to achieve their shared goals of balancing strong consumer protections with preserving access to credit in underserved communities," Wasserman Schultz spokesman Sean Bartlett told The Huffington Post last week.
Several other Florida Democrats, including Rep. Patrick Murphy, a former Mitt Romney donor who is currently running for Senate, also support the bill. But Wasserman Schultz's influence as DNC chair has made her backing uniquely unnerving to liberal Democrats.
Wasserman Schultz isn't just taking heat in Florida. On Wednesday, dozens of activists with National Peoples Action held a protest outside the DNC's headquarters in Washington, calling on Wasserman Schultz to resign her position as chair over the payday loan issue. Protesters held up an inflatable shark and mock movie posters for "Sharknado 4" depicting Wasserman Schultz as an ally of "payday loan sharks." The real "Sharknado 4" will star Tara Reid and Gary Busey.
Zach Carter is a co-host of the HuffPost Politics podcast "So, That Happened." Subscribe here or listen to the latest episode below:
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