Wasserman Schultz Seeks to Protect Predatory Lenders, Faces Primary Challenger

Democratic National Committee Chair Debbie Wasserman Schultz (D-FL) is facing a primary battle against progressive law professor Timothy Canova for her seat in the House in an election that showcases the ongoing struggle over the soul of the Democratic party.

Democratic National Committee Chair Debbie Wasserman Schultz (D-FL) is facing a primary battle against Timothy Canova, a progressive law professor, for her seat in the House, in an election that showcases the ongoing struggle over the soul of the Democratic party. Fox News / YouTube

Incumbent Rep. Debbie Wasserman Schultz (D-FL) will face off in a primary battle this August against Timothy Canova, a progressive law professor, for her seat in the House—showcasing a struggle that, at its core, is about defining what the Democratic party is and how to hold it accountable.

Although she is facing a challenger for office for the first time, the six-term congresswoman and head of the Democratic National Committee (DNC) is no stranger to controversy. Wasserman Schultz has been at the center of a string of heated criticisms directed at her handling of the DNC as well as allegations that she initially limited the number of the party’s primary debates, steadfastly refusing to add more until she came under pressure. In August, Democratic presidential candidate Martin O’Malley went so far as to claim that Wasserman Schultz and other “party bosses” had purposefully limited debates and were “rigging the process and stacking for the deck” for Hillary Clinton.

As the campaign season continued, so did criticism of the DNC leader. In January, Wasserman Schultz again faced heavy criticism after suggesting that young women aren’t supporting Clinton because there is “a complacency among the generation” who were born after Roe v. Wade was decided.

Now, before Florida voters go to the polls on August 30 to pick a Democratic nominee to represent them in the race for the House, Wasserman Schultz’s efforts to gut payday loan regulations are again putting her in the hot seat.

Predatory payday loan lenders often prey on those in poverty, offering high-interest, short-term loans most are unable to pay off. “In any given year, 12 million Americans take out a payday loan, which often comes with a triple-digit annual interest rate,” Joe Valenti, director of asset building at the Center for American Progress, and Alice Vickers, the director of the Florida Alliance for Consumer Protection, explained in a post for Talk Poverty. “And, as four out of every five of these borrowers aren’t able to afford these usurious rates, millions end up saddled with unsustainable debt.”

Last Tuesday, the Huffington Post reported that Wasserman Schultz was co-sponsoring a new measure rolling back protections put forth by the Obama administration’s Consumer Financial Protection Bureau (CFPB) against predatory lending practices. As the Post’s Senior Political Economy Reporter Zach Carter explained, the DNC leader’s support of the plan aligned her with Republicans who have relentlessly attacked the CFPB.

“As the CFPB has moved closer to adopting new rules to shield families from predatory lending, the GOP has assailed the agency from every conceivable angle—going after its budget, attempting to tie its hands with new layers of red tape, fomenting conspiracy theories about rogue regulators illegally shutting down businesses and launching direct attacks on payday loan rules themselves,” wrote Carter.

And while Wasserman Schultz is hardly the first Democrat to support such legislation, as the head of the DNC, “her support undercuts efforts by liberals in Congress to draw contrasts with Republicans on economic issues,” Carter continued.

Critics have also noted past payday lender industry contributions to Wasserman Schultz. In a television ad that began airing Thursday, the nonprofit group Allied Progress, which, according to its website, works to “hold powerful special interests accountable and empower hardworking Americans,” accused the Florida representative of working to “sabotage” President Obama’s efforts to hold payday lenders accountable while taking industry money.

“The difference between Debbie Wasserman Schultz’s relationship with payday lenders and the average borrower’s relationship with payday lenders could not be more stark,” Karl Frisch, the executive director of Allied Progress, told Politico. “Rep. Wasserman Schultz is benefiting greatly while borrowers are left holding the bag. It’s time for her to quit trying to sabotage President Obama’s hard work to hold payday lenders accountable and instead join him in standing up for hardworking Florida families.”

Wasserman Schultz did not respond to requests for comment.

Disdain for Wasserman Schultz’s tenure at the DNC and in the House has prompted many to flock to Democratic challenger Timothy Canova in hopes of replacing her. The Florida primary battle between the two candidates showcases a struggle between what it means to be a Democrat as a self-labeled progressive takes on an incumbent firmly entrenched in the Democratic party—similar to the battle taking place in the presidential primary between Sen. Bernie Sanders (I-VT) and Hillary Clinton.

In an interview with the Huffington Post Canova presented himself as the progressive alternative to Wasserman Schultz, noting that the populism he represents used to be the norm for Democrats. “The progressive wing of the party—which really used to dominate the party from Franklin Roosevelt through John Kennedy—has mostly been taken for granted,” Canova told the outlet. “Their votes are curried by the New Democrats at election time, but when it comes time to governing, they’re really marginalized.”

On his website, Canova calls himself as an “activist, attorney, educator” who has “been challenging Wall Street banks and political corruption for most of his adult life,” and lists campaign finance reform, reversing wealth and income inequality, addressing climate change, and ending the war on drugs as his key issues.

Pitching himself in a post for the Daily Kos, Canova contrasted himself with his rival by pointing to donations made to her by private interest groups and vowing that his campaign is “not taking money from “corporate persons,” and will instead rely on “small donations from real people who are fed up with politics as usual.”

Howie Klein, publisher of Down With Tyranny and founder of the Blue America PAC, which contributes to Canova, confirmed to Rewire in a phone interview that donations coming to the group for Canova are coming from small donors.

“We’re one of many groups that is helping him raise money, and our average contribution is around $45 …. I expect that we will probably raise around $50,000 for him by the time of the elections, totally in small donations. No big ones—not one so far,” said Klein.

The primary battle between Wasserman Schultz is stirring up excitement, both for its potential to oust a party leader and for demonstrating the importance of challenging establishment candidates and holding politicians accountable.

“By demonstrating to incumbent politicians that their party affiliation is not enough, primary challenges can be a very effective way of influencing the direction of the national party. And by providing core constituencies in the party a forum where they can’t be taken for granted, primary challenges show how party building in a democracy ought to work: from the bottom up,” explained Century Foundation Fellow Amy B. Dean in an op-ed for Al Jazeera America.

“While embracing the lesser evil tends to produce a disengaged base, demanding accountability even of incumbent politicians is a recipe for revitalization. And the excitement around the Florida race, which may shake up the Democratic Party leadership, is exhibit A for this case,” wrote Dean.

“In deep-blue districts, like her [Wasserman Schultz’s] district, where Republicans don’t even bother to run, you need primaries to keep … a Democrat honest. Or in a deep-red district, you need a primary to keep a Republican honest,” Klein noted when asked about the importance of such races.

Klein went on to explain that primary battles such as the one playing out in Florida are a necessity for a healthy party and political system. “It is just absolutely crucial for the sake of a vibrant healthy Democratic Party… and also for the sake of American democracy that there be primaries in these kinds of districts.”

CORRECTION: This article has been updated to clarify the date of the Florida primary election.