New Florida law will loosen small-dollar lending rules
Florida Gov. Rick Scott signed a bill Monday that will loosen the state’s rules for small-dollar consumer lending.
The law, which sailed through both houses of the Florida Legislature, authorizes 60- to 90-day loans of up to $1,000, while continuing to allow 30-day payday loans.
The legislation was pushed by the payday loan industry. Supporters argue that the law will ensure access to credit to cash-strapped Florida consumers, who might be unable to obtain payday loans as a result of new rules from the Consumer Financial Protection Bureau meant to crack down on high-cost consumer loans of up 45 days.
State Sen. Rob Bradley, a Republican who sponsored the legislation, touted the bill as a way to protect 10,000 jobs in the Florida payday lending industry that he said were at risk because of the CFPB’s actions.
Consumer advocates noted in response that that payday lenders do not have 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.
The bill’s opponents also say that many Florida consumers will be worse off under the new rules than they were previously.
A borrower who takes out a 60-day, $1,000 loan under the new law will owe fees of around $215, according to an analysis by Florida legislative staffers. A Sunshine State resident who takes out two 30-day, $500 payday loans owes $110 in fees.
Florida is 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.