A liberal group is spending $100,000 in television ads in South Florida to call out embattled Democratic National Committee chairwoman Debbie Wasserman Schultz for not cracking down harder on what many call the predatory practices of the payday lending industry.
Allied Progress, in its 30-second ad, uses the congresswoman’s recent appearance on a local Sunday public affairs show to slam her for co-sponsoring a bill that would delay the federal Consumer Financial Protection Board from regulating the business.
Payday lenders have long been a target of criticism by politicians and consumer advocates, who argue the industry charges extremely high-interest rates to customers, who are often the poor. The industry has argued it provides a necessary financial service to people in need of emergency funds.
The ad features Wasserman Schultz saying “payday lending is unfortunately … necessary” during an April 10 interview on CBS-4’s “Facing South Florida with Jim DeFede.”
“No, Congresswoman, it’s predatory,” says a voiceover. “Tell Debbie Wasserman Schultz to stop siding with payday lenders.”
“How anyone could describe this racket as ‘necessary’ -unfortunate or not – is beyond me,” Karl Frisch, executive director of Allied Progress, told The Associated Press in announcing the six-figure ad buy. The ad begins airing Tuesday for at least a week in the in the Miami TV market.
He also bashes the congresswoman for collecting more than $68,000 in campaign contributions from the payday lending industry, citing figures from the Center for Responsible Politics.
“(Borrowers) find themselves trapped in a cycle of debt while payday lenders rake in piles of cash and then turn around and donate to powerful politicians like Wasserman Schultz,” said Frisch.
Ryan Banfill, Wasserman Schultz’s campaign spokesman, said “the ad, like all the others, intentionally takes her out of context.”
He said the congresswoman said “payday lending is unfortunately a necessary component of how people get access to capital that are working poor” and that increasing the minimum wage to $15 an hour would make payday loans unnecessary.
“This is a Super PAC masquerading as a consumer group,” he said. “The group apparently has decided they can’t win a debate without resorting to distortions and bullying. That’s unfortunate for the people who just want to responsibly pay their bills but are short on cash.”
He added that Wasserman Schultz “will continue to fight hard to protect consumers as her constituents know she always has.”
The ad buy comes at a time when Wasserman Schultz is facing a serious challenger in the Democratic primary for Florida’s 23rd congressional district seat and has come under fire from Democratic presidential candidate Bernie Sanders.
Tim Canova, a university law professor, has raised more than $1.5 million and gotten the endorsement of Sanders in his quest to defeat her. She’s held the seat since 2005. The district is heavily Democratic, so the winner of the Aug. 30 primary is all but assured of winning the general election in November.
The Sanders campaign has accused her of providing more favorable conditions to front-runner Hillary Clinton during the primaries, pointing to the quantity and timing of debates and a dispute over access to party data.
Washington-based Allied Progress has been a vocal critic of her. It previously produced a TV ad and paid for a pair of billboards in the congresswoman’s South Florida district, attacking her position on payday loans. It has also launched an online petition, DebtTrapDebbie.com, calling on her to “stop sabotaging President Obama‘s hard work to hold payday lenders accountable.”
Wasserman Schultz is one of 24 co-sponsors of H.R. 4018, a bipartisan bill that would allow states, including Florida, to continue to regulate payday lenders instead of the federal government and delay federal rules for two years. Half the bill’s co-sponsors are from Florida.
In the CBS-4 interview, Wasserman Schultz said the controversy over the bill was “overblown,” adding it only says “let’s push the pause button” to let other states “that don’t have as good protections as we do” catch up to Florida.
Payday loans are often used to cover an unexpected expense or to make ends meet before the next paycheck. But for many borrowers, short-term loans wind up being difficult to pay off, leading to a cycle of debt that can drag on for months.
Such loans drain $4.1 billion in annual fees from consumers in 36 states where the loans are legal, according to report this month by the non-profit Center For Responsible Lending. It found that borrowers pay $458 in fees on a typical $350, two-week loan. Interest rates in Florida for payday loans average 304 percent.
Republished with permission of the Associated Press.