The issue of payday lending has become one of the Florida-centric issues in Florida's U.S. Senate campaign.  Recently, Rep. Patrick Murphy, who's running for the Democratic nomination, conducted a conference call with reporters, and when the discussion of payday lending came up, Murphy told the press that Florida was one of the better states in the country when it came to consumer protection regulations, and that Florida regulations should be used as a model by other states.

On the conference call, Murphy said that Florida’s regulations on the payday lending industry are "stronger than almost any other state."  Our partners at PolitiFact took a look at this claim to see if it was true.  PolitiFact reporter Joshua Gillin says that Murphy's claim rates FALSE on the Truth-O-Meter.  Gillin said that there's a distinction between federa and state laws, and the effectiveness of each.

"We talked to a lot of consumer advocates and research groups when we started looking into the payday lending industry," said Gillin.  "What we found was that the federal laws are best for consumers.  State laws, on the other hand, are not as strict, and don't really live up to Murphy's claim."

Gillin noted the following:

  • In Florida, there is a cap on the amount of fees that you can be charged for this type of loan.  That fee is capped at $35.  Other states have different caps or no caps at all.
  • When it comes to the interest rate, Florida law leaves it completely unregulated.
  • The average interest rate on these loans in Florida is around 278% annually.

Gillin also said that those same consumer groups wanted to emphasize that the extrememly high interest rates are what they're fighting.  While Florida's payday law may be better that laws in other states, there's no evidence to show that it's stronger than almost any other state.  Because of that lack of evidence, Muprhy's cliam that Florida payday lending regulations are "stronger than almost any other state" is rated FALSE on the Truth-O-Meter.

 

SOURCES: Tough Florida  payday lending industry laws?