The Democratic Congressional Campaign Committee is hitting six Republicans in seats considered vulnerable in the 2016 elections with ads highlighting their vote to delay protections on payday lending and other high-interest credit for soldiers. The DCCC will pay for digital and direct mail ads targeting Reps. Mike Coffman (R-Colo.), John Kline (R-Minn.), Martha McSally (R-Ariz.), Steve Knight (R-Calif.), Joe Heck (R-Nev.) and Tom MacArthur (R-N.J.). Digital ads will direct viewers to an online petition denouncing the vote.
The military has been struggling with the financial impact of predatory lending on service members for years, securing legislation in 2006 cracking down on some forms of high-interest credit, particularly payday lending. But loopholes in the legislation allowed lenders to maneuver around the restrictions, and a 2014 report by the Consumer Financial Protection Bureau documented a host of abuses targeting troops. One family that took out a $2,600 loan ended up paying back $3,966.84 over the course of a year. Another borrower spent $1,428.28 to pay off a $485 loan in just six months. Thousands of service members receive short-term, high-interest loans each year.
The Department of Defense finalized a new set of rules last fall to combat such abuses. Last week, Republicans slipped a measure to postpone those rules into the National Defense Authorization Act -- a major bill that sets the military's funding levels. The bill would have imposed a one-year delay on those rules. Such delays are often intended as a first step toward fully repealing policies.
A host of consumer groups cried foul on the bill, and an amendment offered by Rep. Tammy Duckworth (D-Ill.) to strip out the delay passed by a vote of 32 to 30 at around 4 a.m. on Thursday morning. All 30 of the votes to preserve the delay came from Republicans.
"In the dark of night, many vulnerable House Republicans made the mistake of prioritizing special interests instead of protecting the financial well-being of our service members,” said DCCC spokesperson Meredith Kelly, calling the vote an attempt "to sell out service members to predatory lenders." Kelly added, "They owe military families an explanation."
Republicans had defended the vote by arguing that it would give the government time to conduct a study on the effects of payday loans and other short-term credit on military families. Two such studies have already been conducted. The most recent CFPB study concluded that the DOD rules would help curb abuses and help military families.