PAYDAY LENDER INFLUENCE IN FLORIDA - CENTER - Every Voice
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PAYDAY LENDER INFLUENCE
IN FLORIDA
Do Lawmakers Represent Residents
or Payday Donors and Lobbyists?
FEBRUARY 2018
CENTERINTRODUCTION
Payday loan companies are counting on a fast-moving bill in Florida to protect their predatory business
model. With uncertainty at the federal level around a Consumer Financial Protection Bureau (CFPB)
rule aimed at reining in the worst abuses in the industry, payday executives are seeking ways around
the rule at the state level, and they’re using the traditional playbook to get what they want—campaign
cash plus lobbying. Despite failed attempts last year in 10 states,1 the industry is trying in Florida to
pass legislation (SB 920/HB 857) to allow so-called “installment loans,” with interest rates above 200
annual percentage rate (APR), a rate that can trap many customers in a cycle of debt. Payday lenders’
installment loans are structured as longer, higher-dollar versions of payday loans, with similar hazards.
At stake is the financial stability and wellbeing of
low-income Florida residents—more than 3 million
are payday customers. The industry has already
Together, payday industry
drained more than $2.5 billion in fees from Floridians campaign money and lobbying
over a recent decade and charges APRs that average
278 percent, according to a 2016 report by the Center expenditures since 2007 add up
for Responsible Lending (CRL).2 The more than 900
payday stores in the state outnumber Starbucks
to at least $8 million.
locations and are concentrated in the state's Black
and Latino communities. The share of seniors taking out payday loans more than doubled during that
same period. The industry tends to target vulnerable populations and depend on their ongoing debt to
boost profits—83 percent of payday loans in Florida went to people stuck in seven or more loans per
year, according to data from Florida’s banking regulator.
Despite the well-known predatory nature of the industry, legislation to expand the payday model is
moving swiftly through the Florida legislature before the session ends on March 9. This is happening
amidst broad opposition from the very communities payday lenders claim to serve—the NAACP
Florida State Conference, UnidosUS, and AARP Florida all oppose the bill, along with the Florida
Conference of Catholic Bishops, 11th District Episcopal AME Church, and many others. So why is this
payday bill sailing through committee votes? Part of the explanation is copious campaign cash from
the industry, paired with high-priced lobbying. Together, payday industry campaign money and
lobbying expenditures since 2007 add up to at least $8 million.3
1
Kevin Wack, “States mull loosening of laws in response to CFPB payday rule,” American Banker, February 1, 2018. Accessed February 25, 2018:
https://www.americanbanker.com/news/states-mull-loosening-of-laws-in-response-to-cfpb-payday-rule
2
Brandon Coleman and Delvin Davis, “Perfect Storm: Payday Lenders Harm Florida Consumers Despite State Law,” Center for Responsible Lending,
March 2016. Accessed February 20, 2018: http://www.responsiblelending.org/sites/default/files/nodes/files/research-
publication/crl_perfect_storm_florida_mar2016_0.pdf
3
Campaign contribution figures are based on analysis of data downloaded on February 9, 2018 from the National Institute on Money in State Politics
(NIMSP) and contribution data downloaded on February 18, 2018 from the Florida Department of State’s Campaign Finance Database. Lobbying
expenditure figures are based on data from NIMSP for 2007 through 2016, as well as 2017 and 2018 aggregated compensation reports downloaded
from FloridaLobbyist.Gov (for lobbying the Florida legislature).
PAYDAY LENDER INFLUENCE IN FLORIDA 1
February 2018PAYDAY LENDERS SHOWER LAWMAKERS WITH CAMPAIGN CASH
Payday lenders have made nearly $3 million in Table 1. Campaign Money Totals by Election Cycle
campaign contributions since the 2008 election to Candidates and Committees*
cycle to Florida state candidates, party
committees, and candidate-affiliated PACs TWO YEAR CYCLE TOTAL
(including leadership PACs). The heightened 2008 $432,950
spending in the 2010 cycle likely relates to the 2010 $583,750
open gubernatorial seat, won by Gov. Rick Scott. 2012 $448,153
That cycle, the industry gave $315,750 to the 2014 $535,000
Florida Republican Party and about half that 2016 $525,930
amount to the Florida Democratic Party. Only 2018** $449,585
halfway through the 2018 cycle, payday lenders Total $2,975,367
are giving heavily and appear to be headed for a *Party and candidate-affiliated committees
new record high. **Partial cycle
The two payday companies that give the most
$800,000
campaign cash, Amscot Financial and Advance
America, are also the two companies with the
$583,750 $535,000
largest footprints in the state. Amscot, with over $600,000 $525,930
200 stores in Florida, is the top donor with nearly $448,153 $449,585
$432,950
$1.7 million to politicians in recent years. The
company's record in Florida includes pleading $400,000
guilty to civil racketeering charges in 19984 and a
lifetime ban on selling insurance in Florida for
$200,000
Amscot’s founder and CEO, Ian MacKechnie, in
exchange for the state dropping criminal fraud
charges.5 But MacKechnie successfully protected $0
his billion-dollar payday business, using cash 2008 2010 2012 2014 2016 2018**
gifts to make friends at the state and federal
level,6 as well as among non-profit and civil
rights organizations.7
Table 2. Campaign Money Totals by Payday Donor
4
Alli Knothe, “Are payday lenders like Tampa-based Amscot a DONOR TOTAL SINCE 2007
necessary part of the banking industry?” Tampa Bay Times, July 22, Amscot Financial $1,687,580
2016. Accessed February 21, 2018:
Advance America $765,938
http://www.tampabay.com/news/business/are-payday-lenders-like-
tampa-based-amscot-a-necessary-part-of-the-banking/2286447
Dollar Financial Group $274,020
5
"Amscot Owner Ordered Out Of Insurance Business," Property and Cash America International* $148,500
Casualty.com, August 17, 1998. Accessed February 26, 2018: Check Into Cash $39,280
https://www.propertyandcasualty.com/doc/amscot-owner-ordered- Checksmart Financial Co $25,350
out-of-insurance-busines-0001 Ace Cash Express $10,400
6
Donor Lookup results provided by the Center for Responsive Politics, Financial Service Center Of Florida $19,300
accessed February 26, 2018: https://www.opensecrets.org/donor-
Community Financial Services Assn $5,000
lookup/results?name=mackechnie%2C+ian
7
"Amscot Financial Presents $100,000 Gift to Urban Leagues in the State
Total $2,975,367
of Florida," Business Wire, August 22, 2017. Accessed February 26, 2018: *Cash America was licensed as a payday lender through 2014.
https://www.businesswire.com/news/home/20170822005689/en/Amsc Donations from Cash America through 2014 were included.
ot-Financial-Presents-100000-Gift-Urban-Leagues
PAYDAY LENDER INFLUENCE IN FLORIDA 2
February 2018Like many special interest donors, payday lenders spend heavily at the wholesale level, giving to party
committees that can then spend strategically on key races and candidates. The top recipient of payday
campaign cash over the past decade was the Florida Republican Party, which took over $1.1 million in
donations. The Florida Republican Senatorial committee netted another $112,500. The Florida
Democratic Party took at least $412,500. And Let's Get to Work, the PAC supporting Gov. Rick Scott,
raised at least $175,110 from payday interests.
The state senator championing SB 920, Sen. Rob Bradley, has taken donations directly to his campaign
committee (at least $1,500), and he's taken much more through his PAC, Working for Florida's Families
($17,500). Lawmakers often take advantage of larger checks to PACs, since donations to their campaign
committees are limited to smaller amounts. Other candidate-affiliated PACs taking large sums from
the payday industry belong to powerful legislative leaders, including House Speaker Rick Corcoran's
Watchdog PAC ($25,000).
When making contributions directly to candidates' campaign committees, payday lenders have again
targeted leaders, including Senate President Joe Negron ($10,000), Senate Majority Leader Wilton
Simpson ($7,000), and Sen. Lizbeth Benacquisto ($6,000), chair of the Senate Rules committee where
the bill will soon be heard in its final Senate committee stop. Also, just shy of the top recipient list is
Sen. Oscar Braynon, who is co-sponsoring the payday bill and has taken at least $4,000.
Table 3. Campaign Money Totals by Top Party Table 4. Campaign Money Totals by Top Candidate
Committee or Candidate-Affiliated PAC Recipients Recipients, Among Current State Legislators
PARTY OR CANDIDATE-AFFILIATED PAC* TOTAL SINCE 2007 CANDIDATE CHAMBER TOTAL SINCE 2007
Florida Republican Party $1,114,953 Dana Young Senate $10,500
Florida Democratic Party $412,500 Joe Negron Senate $10,000
Let's Get To Work $175,110 Anitere Flores Senate $7,000
Florida Republican Senatorial Campaign $112,500 Wilton Simpson Senate $7,000
Florida Leadership Committee $34,500 Bobby Powell Jr. Senate $7,000
The Conservative $32,500 Darryl Ervin Rouson Senate $6,750
Watchdog PAC $25,000 Kelli Stargel Senate $6,500
Innovate Florida $25,000 Ross Spano House $6,500
Floridians For Economic Freedom $22,500 Chris Latvala House $6,500
Floridians For Common Sense $18,500 Lizbeth Benacquisto Senate $6,000
Working For Florida's Families $17,500 Dorothy L. Hukill Senate $6,000
Floridians For Strong Leadership $17,500 Jeffrey R. Brandes Senate $6,000
Justice For All $15,000 David Santiago House $6,000
Jobs For Florida $15,000 Denise Grimsley Senate $5,500
Florida Grown PC $15,000 Jeff Brandes Senate $5,000
Florida Democratic Legislative Campaign $15,000 Tom Lee Senate $5,000
Rebuild Florida $12,500 Wengay Newton House $5,000
Protect Florida Families $12,500 Kathleen Peters House $5,000
Friends Of Dana Young $12,500 Paul Renner House $5,000
Conservative Principles For Florida $12,500 Note: These totals only reflect donations directly to candidate
*Leadership PACs and super PACs. Some may be affiliated with campaign committees. Total amounts controlled by a
legislators who are no longer in office. candidate would also include donations to leadership PACs.
PAYDAY LENDER INFLUENCE IN FLORIDA 3
February 2018On the House side, the primary bill sponsor, Rep. Jamie Grant, took at least $3,000 directly and another
$5,000 through his PAC, Floridians for Liberty and Innovation. House co-sponsor and Democratic
leader Janet Cruz also took at least $3,000 to her state campaign committee in the past. This cycle, Cruz
is running for a county level seat (Hillsborough County Commissioner). Since September 2017, her
county campaign committee has taken another $3,000 from the payday industry: $2,000 from Amscot
and $1,000 from Advance America (these are maximum level checks allowed per election, primary or
general).8 The $1,000 check from Advance America came on December 4, 2017, the same day the House
payday bill (HB 857) was filed, with Rep. Cruz listed as a co-sponsor.9 Cruz mentioned both of these
payday lenders by name in her defense of the bill while in the House Commerce Committee.
CAMPAIGN CASH IS BACKED UP WITH LOBBYING
Over the past decade, the $3 million in campaign cash from the industry has been coupled with $5
million spent on lobbying, by individuals and firms with close ties to Florida politicians. The Florida
Community Financial Services Association, a trade group that includes payday companies, spent more
than $1 million on lobbying and currently enlists 16 registered lobbyists.10 Amscot also spent $1 million
on lobbying this past decade. Among their 11 current lobbyists are well-connected former Democratic
lawmakers: ex-U.S. Rep. Kendrick Meek and ex-Florida Rep. Joe Gibbons.11 Both the Florida Community
Financial Services Association and Amscot employ the well-established lobbying firm Metz Husband &
Daughton PA, among others.
Texas-based Cash America International, licensed in Florida to offer payday loans until recently, spent
nearly $1.2 million on Florida lobbying between 2007 and 2014. Cash America was the first payday
company the CFPB took enforcement action against in 2013, for overcharging military members (and
thus violating the federal Military Lending Act) and deleting or hiding evidence from the CFPB, among
other charges.12
Table 6. Lobbying Expenditure Totals By Payday Organization
PAYDAY COMPANY OR TRADE GROUP TOTAL SINCE 2007
Cash America International* $1,175,000
Florida Community Financial Services Assn $1,060,000
Amscot Financial $1,025,000
Community Financial Services Assn Of America $900,000
Dollar Financial Group $420,000
CNU Online Holdings $335,000
Financial Service Center Of Florida $200,000
Total $5,115,000
*Cash America was licensed as a payday lender through 2014. Lobbying
expenditures by Cash America through 2014 were included.
8
Hillsborough County Financial Report Transaction Search Page, accessed February 26, 2018: https://www.votehillsborough.org/About-Office-
Holders-Candidates/Candidate-Finance-Search
9
Florida Senate legislative information on HB 857, accessed February 26, 2018: https://www.flsenate.gov/Session/Bill/2018/857
10
Florida Lobbyist Registration Office, accessed February 22, 2018: https://floridalobbyist.gov/LobbyistInformation/GetLobbyistPrincipal
11
Gray Rohrer, "Lawmakers back longer, higher-interest payday loans," Orlando Sentinel, January 18, 2018. Accessed February 22, 2018:
http://www.orlandosentinel.com/news/politics/political-pulse/os-payday-lenders-bill-20180118-story.html
12
Sheryl Harris, "Cash America to pay $19 million - most in refunds - in CFPB's first payday action," The Plain Dealer, November 20, 2013. Accessed
February 22, 2018: http://www.cleveland.com/consumeraffairs/index.ssf/2013/11/cash_america_to_pay_19_million.html
PAYDAY LENDER INFLUENCE IN FLORIDA 4
February 2018CONCLUSION The payday industry’s power over legislators results in policymaking that allows the industry to trap millions of Florida residents in a cycle of debt that’s hard to escape. While payday CEOs profit, their customers struggle to get by. Public policy shouldn’t be based on how much campaign cash an industry can give, but about what’s best for the public. Lawmakers who’ve taken big bucks from these lenders are rushing the industry- backed bill through the legislature, when instead they should listen to constituents who are expressing opposition to predatory lending. Lawmakers should make these loans safer by capping interest rates and supporting access to alternative products and tools that promote financial capability. And, importantly, we need to overhaul our campaign finance system, which prizes campaign cash and lobbyists over the needs of ordinary people. We need a system that allows candidates to run for office on the strength of their ideas and grassroots support, irrespective of whether they’re wealthy or have access to big campaign donors. Creating a small-donor matching program, or similar system to raise the voices of everyday people in politics, would go a long way toward creating a government that’s truly of, by, and for the people. Florida Consumer Action Network (FCAN) is a grassroots organization which empowers citizens to influence public policy on issues including finance, insurance, utilities, and transportation. Established in 1984, FCAN stands for an America where everyone gets their fair share, does their fair share, and pays their fair share; and where everyone plays by the same rules. Every Voice Center is a national organization that works to ensure that everyone is heard in America’s democracy by amplifying the voices of everyday people and reducing the influence of big money in politics. We believe our government should work for everyone, not just the rich and powerful. Learn more at EveryVoice.org. PAYDAY LENDER INFLUENCE IN FLORIDA 5 February 2018
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