New rules against the payday-lending industry were unveiled on Thursday, sparking a quarrel between Elizabeth Warren and Debbie Wasserman Schultz. The payday industry has boomed in recent years, luring in millions of Americans with quick, high-interest loans that cause borrowers to be stuck in the lending cycle.
Limits on how often borrowers can take out payday loans and requirements on lenders that force the lender to verify that the borrower will not take on new debt to satisfy the loan will be put in place.
Wasserman Schultz backed legislation that would delay the implementation of the new rules for a period of two years. Schultz states that the backing of the delay will allow states to adopt stricter rules against the industry.
Warren fought back against Schultz and commented, “When emergencies arise, people need access to credit,” in a discussion at the Senate Banking Committee. Warren continued, “But payday lenders that build business models around trapping people in a never-ending cycle of debt are throwing bricks to a drowning man.”
Schultz has attempted to push the bill delay through by rallying Democratic support for the bipartisan bill.
The payday industry is bigger in some cities, such as Kansas City, than McDonald’s and Starbucks storefronts.