Payday lenders have donated about $2.5 million to Florida politicians and both political parties in recent years, according to a new analysis by a liberal group.
Allied Progress has drawn attention to the issue of payday lending in Florida by attacking U.S. Rep. Debbie Wasserman Schultz, the Democratic National Committee chair, and other politicians who have taken money from the industry.
The group gave the Miami Herald an advanced copy of its new report, “A Florida Plan: How payday lenders bought Florida’s political establishment.” The report lists donations given to federal and state candidates as well as the state’s Republican and Democratic parties since 2009.
Overall, Republicans received $1.6 million and Democrats received about $890,000, while $29,000 went to independents. But the top individual recipients were South Florida Democrats:
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▪ U.S. Rep. Alcee Hastings of Delray Beach: $110,700;
▪ Former U.S. Rep Kendrick Meek, who ran for the U.S. Senate in 2010: $72,800;
▪ U.S. Rep. Patrick Murphy of Jupiter, who is running for the Senate: $51,000;
▪ Wasserman Schultz of Weston: $50,600.
The Republican Party of Florida received $1,083,447, and the Florida Democratic Party received about $366,500.
More than one-third of the donations came from the MacKechnie family and their lending company, Amscot financial, according to the report. (In 1998, Amscot Insurance pleaded guilty to civil racketeering charges and was banned for life from selling auto insurance in Florida. In exchange the state agreed not to pursue criminal charges. MacKechnie said his company took the plea to get it behind him and that the state was wrong, the Tampa Bay Times reported.) Amscot is headquartered in Tampa and has locations throughout the state of Florida.
“Florida’s political establishment has pushed the disastrous Florida model of payday lending on the rest of the country because they have been bought by the industry and one family and company in particular,” said Karl Frisch, executive director of Allied Progress.
Payday loans are small, short-term loans that borrowers — who are typically poor — promise to pay out of their next paycheck. Florida’s payday loan law passed in 2001 and included protections that were intended to help the poor avoid an endless cycle of debt.
However, PolitiFact Florida found that consumer groups, independent researchers at Pew Charitable Trusts and the head of President Barack Obama’s Consumer Financial Protection Bureau have raised multiple criticisms of Florida’s law. Critics say that Florida’s law leaves customers trapped in a cycle of debt paying high interest rates and lacks protections that other states, such as Colorado, have added.
The NAACP, the National Council of La Raza and the Southern Poverty Law Center are among more than 200 groups that wrote a letter in December to Congress arguing that the “industry-backed Florida law” would hurt consumers.
The federal consumer protection bureau released an outline of proposed payday rules for the country in 2015 and plans to release a more complete proposal soon.
That prompted Florida’s congressional delegation to push back. Nearly all of the members signed a joint letter in April 2015 asking the bureau to look at Florida’s law as a model. Many Florida members have signed on to a bill sponsored by U.S. Rep. Dennis Ross, R-Lakeland, that would give precedence to the state’s law and delay implementation of federal rules for two years.
The issue of payday lending has become a thorn in the side of Wasserman Schultz, who is facing her first re-election primary challenge since winning the seat in 2004.
In March, Allied Progress launched a TV ad attacking Wasserman Schultz for her stance on payday loans and later posted billboards in her South Florida district. Her Democratic primary opponent, Nova Southeastern University law professor Tim Canova, has piggybacked on those attacks.
Wasserman Schultz defended her stance on payday loans in an April interview with CBS4’s Jim DeFede.
“The controversy is very overblown,” she said. She argued for balancing consumer protections with maintaining the working poor’s access to capital at payday loan stores.
Wasserman Schultz argued that the Ross bill tells the federal bureau to “push the pause button” and let “other states that don’t have as good as protections as we do — we could certainly have better — let’s let those states catch up to Florida.”
Wasserman Schultz’s campaign spokesman, Ryan Banfill, told the Miami Herald that she “has fought her whole public service career to hold unscrupulous payday lenders and others who prey on consumers accountable.” Banfill said that while she was in the state Legislature, Wasserman Schultz was part of a bipartisan effort to pass Florida’s payday law.
Wasserman Schultz is a cosponsor of the Safe Lending Act of 2016 introduced in April. Allied Progress praised that bill as legislation that “would help protect consumers from some of the worst practices of predatory lenders.” The bill hasn’t had a hearing yet.
The donations she received from the payday industry are a small portion of the millions of dollars Wasserman Schultz has raised for her re-election campaigns.
Payday loans could become a topic in the Democratic Senate primary, in which Murphy faces U.S. Rep. Alan Grayson.
Last year, Grayson signed the joint letter that defended Florida’s law, but later said he would oppose the bill filed by Ross because of the two-year waiting period.
Murphy said in April that Florida’s regulations on the payday lending industry are “stronger than almost any other state.”
PolitiFact Florida rated that claim False.