At Opportunity For All Floridians, we advocate for economic fairness, aiming to make Florida affordable again. Despite the strong opposition from our members, which manifested in over 1,900 emails, Republican lawmakers, backed by the short-term lending industry, passed a bill in 2023 that doubled interest rates. It breezed through committees and received a House vote of 96 Yeas to 18 Nays and a Senate count of 22 Yeas to 9 Nays. The failure of the legislature to recognize the burden on Floridians’ finances was deeply disappointing.
However, our members remained resolute. We spearheaded a veto campaign, and on June 26, 2023, Governor DeSantis vetoed the bill, stating “This increase in rates may result in additional consumer indebtedness and could exacerbate the pinch already being felt.” But we’re bracing ourselves; the industry will likely bolster their donations and reintroduce this predatory bill in 2024.
Political Donations = Political Influence
The lending industry’s influence? Hefty annual donations to Florida lawmakers, with a total of $190,000 donated to politicians across both parties in 2022 alone.
Independent reporter Jason Garcia revealed that records show a political committee controlled by the Florida Financial Services Association gave $100,000 in September of 2022 to top Republican lawmakers — including $50,000 to a fund controlled by incoming House Speaker Paul Renner, a Republican from Jacksonville, and $50,000 to a fund controlled by incoming Senate President Kathleen Passidomo, a Republican from Naples.
The companies are trying to ingratiate themselves with Democratic leaders, too, giving $25,000 that same month to the Florida Democratic Party.
The Statutory Changes the Lending Industry Wants
The industry is pushing to eliminate Florida’s tiered interest rate structure and replace it with a flat rate of 36%. This drastic change in interest rates would be detrimental to vulnerable borrowers who already struggle to make ends meet. Currently, short-term lenders charge interest based on a tier.
| Loan Amounts | Interest Rate Caps (Current Florida Law) | Interest Rate Caps (As proposed in SB 540 / HB 1267) |
|---|---|---|
| Up to $3,000 | 30% | 36% |
| $3,001 – $4,000 | 24% | 36% |
| $4,001 – $25,000 | 18% | 36% |
Now they want a flat 36% on loans up to $25,000, which is double the current usury law limit of 18%.
The Predatory Lending Players
The proposed interest rate changes are being supported by short-term lenders who are represented by The Florida Financial Services Association. The three largest short-term lenders who operate in Florida under these statutes are Oportun, One Main, and Mariner Finance. All of the lenders backing the bill are, or have been, under federal and/or state investigations for predatory lending practices.
Read more on the Oportun investigation: “Fintech’s Algorithm Wrongfully Depleted Checking Accounts, Leading to Overdraft Penalties for Customers”
Read more on the One Main investigation: “The Bureau found that OneMain engaged in deceptive acts or practices in violation of the Consumer Financial Protection Act of 2010 (CFPA) by misleading consumers into believing they must purchase add-on products to receive loans and that they could cancel the add-on products within a prescribed time period without cost.”
Read more on the Mariner Finance investigation: “Mariner Finance, with more than 480 offices in 27 states, was accused of engaging in “widespread credit insurance packing,” by selling costly policies and other products without telling borrowers or even after being instructed not to.”
How Florida Lawmakers Skirted Usury Laws to Support These Predatory Lenders
While Florida enforces usury laws capping interest rates at 18%, there is an exemption for loans under $25,000 which can be charged at higher, tiered rates. The current lobbying from short-term lenders to swap these tiered rates for a flat, and predatory, 36% interest is both alarming and revealing. The lenders are already operating beyond the intent of the usury law, we do not need to burden borrowers with higher interest rates. It’s worth reiterating: the Florida Financial Services Association, which vouches for these lenders, has generously donated $190,000 to politicians from both major parties to bolster their agenda.
Florida’s residents, who favor capping interest rates, understand the potentially catastrophic repercussions of unchecked high-interest loans on their families and the broader community. Permitting rates beyond 18% is a win for lenders and a loss for borrowers.
