I remember as a young Senate staffer in late 2006, after the GOP had lost both houses of Congress to anti-war Democrats, speculating what we would do in the lame duck session before the end of the year — not much of anything, my bosses told me, because to try to ramrod partisan legislation through at the last minute was immoral. If the voters had spoken, we must respect their will.
To underscore this, President George W. Bush asked then-Secretary of Defense Donald Rumsfeld to resign. If the voters rejected the Iraq War, then one of its chief architects should retire.
Fast-forward to 2024, and lame-duck President Joe Biden demonstrated none of the same honor. Instead, he unleashed a barrage of last-minute far-left edicts in defiance of his party's staggering election loss.
Rather than acknowledge why they failed, Democrats would rather sabotage President Donald Trump's pro-growth agenda.
While more attention has been paid to attempts to overturn the Second Amendment and destroy American energy independence, one terrible policy has quietly gone unrebuked. One his way out the door, Biden gave the Consumer Financial Protection Bureau the ability to cap overdraft fees, the small charges a bank pings you with if you withdraw more than is available.
With this new authority, the CFPB has ruled that overdraft fees can be no more than $5. (Fees are typically in the $20 to $35 range.)
As with all government price controls, this policy risks creating shortages or forcing banks to just eliminate the service altogether.
See, overdraft fees are sort of like a quick, one-shot interest payment on a loan. The only reason financial institutions can offer this kind of service, take this kind of risk, is that it makes them a profit.
If they can't make money on something — or, worse, if they actually end up losing money — then they will stop doing it.
And, of course, like virtually all Democrat policies designed to help lower-income people, this policy will hurt them.
Overdraft fee cap results in a loss of overdraft coverage, according to a study by the Federal Reserve Bank of New York, which could lead to "a decline in account ownership among low-income households." So we should proceed with this only if the goal is to unbank the most vulnerable among us.
The overdraft cap was created by (thankfully) former CFPB Director Rohit Chopra. However, Senate Banking Committee Chairman Tim Scott, R-S.C., and House Financial Services Committee Chairman French Hill, R-Ark., immediately leapt into action to repeal it under the Congressional Review Act.
Last month, the Senate voted 52-48 in support of a repeal, so now the only thing standing between it and the president's signature is a vote by the full House.
No one likes having to pay an overdraft fee, but the alternative for a functioning society isn't a magical world where money shoots into our wallets.
With the president's support of the repeal, lower-income families throughout the country will keep maintain financial services. Moving forward, Republicans will have protected people from the CFPB's jackbooted policies.
The CFPB was created as part of the government's "never let a crisis go to waste" reaction to the financial crash. This rogue agency was given broad powers to regulate the world of high finance — which is something that in 2008 it proved it really needed — but the CFPB has a long history of seemingly unconstitutional and unethical policies.
CFPB has been on the wrong side on credit unions, so-called junk fees, student loans, privacy issues, and on and on.
At one point, CFPB wanted access to peer into people's Venmo accounts. Democrats love civil rights for terrorists, but not for people using an app to split a dinner bill.
People should have more financial options rather than fewer. The more options there are, the more companies have to compete for their business, and everyone wins.
Democrats' just proposing an overdraft fee was immoral, a rebuke of commonsense economics and of the voters' rebuke of the Biden administration. Fortunately for us, however, no matter how much damage Biden did on his way out the door, America First Republicans run Washington now.
Jared Whitley is a longtime politico who has worked in the US Senate, White House, and defense industry. He has an MBA from Hult business school in Dubai, and in 2024 he won the Top of the Rockies best columnist award. Read Jared Whitley's Reports — More Here
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