The Sarasota County Democratic Party (SCDP) attacked today as “appalling” state Sen. Joe Gruters’ (R-District 22) bill to double interest rates on consumer finance loans for low and middle-income borrowers.
“With thousands of Floridians, particularly the low and middle income, still reeling from the effects of Hurricane Ian and trying to cope with inflation, Joe Gruters decides to introduce a bill that would allow high-interest lenders to increase the interest on consumer finance loans to 36 percent,” said SCDP Chair Daniel Kuether. “It’s appalling, especially since Gruters has portrayed himself as the champion of the little guy.”
Gruters’ bill, SB 580, would rewrite the current law to increase from 30 to 36 percent the amount high-interest lenders can charge for consumer loans and charge that 36 percent on that entire amount of the loan.
Under the current exception for consumer finance loans of less than $25,000 – lent primarily to borrowers with poor credit histories or in tight financial circumstances – a lender can charge 30 percent interest on the first $3,000 of a loan; 24 percent on any amount between $3,000 and$4,000; and 18 percent on any remaining amount up to $25,000. Florida law generally sets 18 percent as the maximum interest allowed on a loan – anything higher is considered usury, a felony – but there’s an exception for consumer loans of $25,000 or less.
“It should come as no surprise to Sarasotans that these lenders and their Florida Financial Service Association gave $100,000 last month to funds controlled by the Republican state House speaker and incoming Senate president,” Kuether said. “In Tallahassee, you get what you pay for, and the low and middle income be damned.”
Instead, he added, the Legislature should be expanding Medicaid so that more people have health insurance; improve state unemployment benefits; approve the building of more affordable housing and strengthen eviction protections; reform the tax system; and allow communities to raise the minimum wage.