It's funny how the vibe around a piece of legislation can change.
Several weeks ago, a bill that would let consumer lenders increase the cost of borrowing was, politically speaking, not especially dicey.
That's still likely to happen, but the calculus has become more complicated.
That's because a military and veterans group has weighed in, and it doesn't like the proposal at all. More on that in a bit, but first, here's what the bill does:
Right now, consumer credit outlets – who specialize in personal loans to risky borrowers – can charge 30 percent interest on the first $2,000 of a loan, 24 percent on the next $1,000 and 18 percent on anything over $3,000.
The bill would let them charge 30 percent of the first $3,000, 24 percent on the next $1,000 and 18 percent on anything over $4,000. It would also raise late-fee penalties from $10 to $15.
The measure would apply to the state's 262 consumer finance lenders, storefront operations with names like Sunbelt Credit – "Your Friend When You Need a Personal Loan." Unlike payday lenders, the companies require that money be repaid on an installment plan, an arrangement that generally helps borrowers.
Under the bill, interest on a $5,000 loan would rise about $60, from $744 to $804. That may not sound like a lot, but opponents – like the Florida Conference of Catholic Bishops – say the people seeking these loans are already on the financial fringe.
They're often unable to repay when the loan comes due. So they borrow again – and again. About 75 percent of lenders' volume comes from existing customers refinancing their initial loan.
And that's what worries the Navy-Marine Corps Relief Society, a Virginia-based group that has helped active and retired Marines and sailors for more than 100 years.
Recently, the group's CEO wrote Florida House Speaker Will Weatherford and Senate President Don Gaetz urging them to kill the bill.
Retired Adm. Steve Abbot said the bill would pinch military families already struggling to make ends meet. He said service members "are particularly vulnerable to high-cost lenders" because they're often young consumers with relatively little credit history stationed far from the support network of family and friends.
Last year, he said, his group provided nearly $42 million in financial assistance to service members and their families.
"Much of this assistance," Abbot wrote, "was needed to pay off high-interest credit they could not afford. Raising rates and fees on these loans – and allowing additional charges and costs – will only make these products more toxic."
The admiral's word choice is perfect. Because the bill is certainly more "toxic" today than when I wrote about it in February.
Back then, lawmakers sympathetic to the bill had to decide only if they were willing to incur the wrath of consumer advocates, and those representing the poor – two groups which, historically, don't have very good seats at Florida's legislative circus.
Legislators could correctly point out that consumer lenders make loans other companies won't. And that their rate structure hasn't changed in more than a dozen years. That may be why the measure zipped through the committee process and was easily approved by the Senate last week.
But Abbot's letter adds a new, politically sensitive wrinkle. If opponents can generate some buzz around it, they'll become much harder to ignore.
After all, it's one thing for lawmakers to day dream about Tallahassee's dogwoods and azaleas as the Legal Aid Society denounces a pro-business bill. It's quite another to cross swords with a non-profit representing military members.
That's an issue that could blow up come election time. Can't you just see the negative ads it would inspire?
"When Florida's military members asked for his help last year, Rep. Maximus Bluster turned his back and instead sided with predatory loan companies. Now, he wants to go back to Tallahassee. Tell Rep. Bluster our service members can't afford that."
Like I said, this bill may ultimately pass. But it may generate more drama than anyone expected.
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