More than one million people each year rely on Florida’s short-term loan industry to help them deal with temporary financial challenges. For over 15 years, the state’s consumer-friendly regulations have resulted exceptionally low default rates, with 96 percent of loans paid off within 31 days.
But access to short-term, small-dollar, cash loans may soon get cut off for millions of Florida citizens. That’s because the federal government’s Consumer Financial Protection Bureau has moved forward with a rule that would essentially eliminate this product in Florida. The new 1,700-page “rule” paints the entire country with a broad brush and pre-empts existing Florida law, throwing out the robust consumer protections that
Florida lawmakers developed more than a decade ago.
Tom Feeney served as Speaker of the Florida House from 2000 to 2002, and says the law he helped pass in 2001 serves as a role model for the nation. But he notes lawmakers must act now if they want to preserve short-term loans as an option for consumers in Florida. Feeney currently serves as President and CEO of Associated Industries of Florida, which supports HB 857 and SB 920, draft legislation that would put Florida into compliance with the federal mandate and preserve access to credit for millions of consumers.
“I am tremendously proud that during my term as Speaker, the Florida Legislature crafted a consumer-friendly way of ensuring the short-term credit that so many Floridians rely on,” Feeney said. “Consumers need access to a full range of reliable, proven credit options during times of financial stress. Now 17 years later, it’s critical that the Legislature adopt legislation that complies with federal regulations in a way that allows Florida to maintain this option. The CFPB’s rule will result in a 76 percent reduction in credit availability, and our state needs to avoid this problem so close to a million Floridians can continue to have access to these loans.”
Feeney isn’t just making up the 76% reduction figure, either. That estimate comes directly from the federal Consumer Financial Protection Bureau.
A bipartisan group of lawmakers is pushing for passage of the new legislation, which is up for consideration today and tomorrow.