Record Audio with external USB-Mic: Does "latency" affect the quality?

Hello,

I want to make voice records with an external USB-microphone in Premiere CC. As it seems, the "Tapco USB-Interface" does only support MME-standard but no ASIO standard. If I set the latency to the default value of 200 ms, I get a horrible record. It seems the USB-connection is too slow. However, if I set to latency to 500 ms, it seems to be fine (See screenshot below). But my question is:

Does the latency affect the quality of the recording? Or is it just a delay time, which has no affect?

Would be great if anyone can help! Thanks a lot!