Florida Gov. Rick Scott is facing a landmark decision on whether to expand high-cost consumer lending in the Sunshine State.

Over the last week, both the Florida House and Senate have passed legislation to allow lenders to offer installment loans that would be even costlier than payday loans for many borrowers.

Once a bill gets sent to the governor in Florida, he has 15 days to sign or veto it. Scott, a Republican, has not publicly stated a position on the measure, and his office did not immediately respond to a request for comment.

Florida Gov. Rick Scott
Florida Gov. Rick Scott, a Republican, has 15 days to sign or veto the bill. Bloomberg

The legislation would authorize 60- to 90-day loans of up to $1,000, while continuing to allow payday loans. While the longer-term loans would carry a lower annual percentage rate than Florida’s payday loans, they would be more expensive in many instances.

Consumer advocates who oppose the legislation acknowledge that they face an uphill fight in trying to persuade the governor to issue a veto.

Scott has received political contributions from the payday lending industry, which is backing the bill. What’s more, the legislation passed both the House and Senate with strong bipartisan support.

The bill’s supporters have argued that it will ensure access to credit to cash-strapped consumers in light of Consumer Financial Protection Bureau rules that are meant to crack down on high-cost consumer loans of up to 45 days.

Opponents have countered that payday lenders are not required to be in compliance with most provisions of the CFPB rule until August 2019, and that acting CFPB Director Mick Mulvaney has cast doubt on the rule’s staying power.

If the legislation is enacted, Florida would become the first state to pass a law designed to blunt the impact of the CFPB’s payday lending rule. Last year, bills to legalize high-cost installment loans were introduced in 10 states, but all of them were rejected.

A legislative effort in Indiana to allow high-cost installment loans in the Hoosier State died late last month.

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