May 2, 2023
Washington insiders insist there is no truth to the rumor that Jimmy Carter lamented his record of economic malaise to Joe Biden right after the 2020 election, to which Biden responded, “hold my beer” — but it certainly tracks. The Biden Administration’s reckless, left-wing fiscal policies have caused Americans’ daily expenses to skyrocket to a level not seen since Mr. Carter’s days in the White House.
One hedge against a harsh economy that far more Americans have today compared to 40 years ago are credit cards, which make it possible to better manage rising costs and also help consumers build credit and earn valuable cash-back and reward points. Over 84% of Americans currently use credit cards, which are offered by over 5,000 credit card issuers in the United States, providing consumers numerous financial options based on their spending habits and personal preferences. Now the Consumer Financial Protection Bureau (CFPB) is preparing to make the current economic environment even more difficult for consumers by a policy that would limit cardholder’s access to reliable credit, reduce valuable cash back and reward programs, and increase the cost of lending for all Americans.
Under Director Rohit Chopra, the CFPB is attempting to impose a cap on credit card late fees. The CFPB has sold this effort, to the delight of Senator Elizabeth Warren, as an attempt to protect customers against profit-seeking banks while conveniently ignoring the consumer protections that have been in place since 2009 as a result of the CARD Act. The reality is that this is a radical, politically driven proposal that would upend the credit industry and harm consumers.
In February, the American Bankers Association released a statement explaining that the CFPB’s proposed rule would harm consumers and reduce competition.The Credit Union National Association reiterated this sentiment, condemning the proposal and saying it would “reduce access to safe and affordable open-end credit.” They’re right. A government-enforced reduction in late fees, also known as price controls, would completely disrupt the credit industry and leave consumers out to dry.
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