Like the sanitation crew in the aftermath of an outdoor music festival, the Trump administration and Congressional Republicans are now investing a generous portion of their energies cleaning up the mess left by Joe Biden’s army of activist bureaucrats.
A month after America roundly rejected Biden’s policies at the polls, the outgoing administration published its Fall 2024 Unified Agenda that included a swarm of 11th hour regulatory rules and bureaucratic proposals. A whopping 53 regulations met the definition of “economically significant” for having an impact of $200 million or more on the economy.
The regulations showered down on D.C. with an intensity that would have made Pharaoh release the Israelites. Thankfully, many of these rules were never finalized, meaning Trump appointees can happily let them die on the vine. The rest leave Congress a mere 60 days from their enactment to either let stand or erase from the books through the Congressional Review Act (CRA).
One regulation of priority to the GOP House is the Consumer Financial Protection Bureau (CFPB) rule mandating banks cap overdraft fees at $5.00, an action as absurdly beyond the bureau’s authority as the Coast Guard regulating pet groomers. Compounding the absurdity is that this cap will directly harm the people it is most purported to help.
Opting for overdraft protection is entirely voluntary, like buying avocados. If one thinks avocados are too expensive the option always exists not to purchase them; no bureaucratic rule need be proposed. Millions of bank customers could just as easily forgo overdraft protection yet choose it because they value the convenience it provides, offering a lifeline during a short-term financial crunch and preventing bounced check fees charged by merchants.
The price of this service, like haircuts, or wristwatches, or cat toys, should be set by the market, between buyer and seller to reflect its market value. The CFPB ignores mountains of historical evidence showing price caps not only lead to a reduced supply of the product or service capped, but create a ripple effect forcing businesses to raise prices or cut services elsewhere. And with the certainty of a Nancy Pelosi stock tip, these higher costs and reduced banking services will prove most devastating to lower-income Americans.
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