New federal credit card late fees rule will harm consumers
One of the pillars of a free-market economy is the prerogative granted to lenders to set their own conditions. Borrowers then enjoy the discretion to accept or reject them.
No government entity -- and certainly not one outside of congressional oversight -- has a role to play in such negotiations.
Yet the federal Consumer Financial Protection Bureau (CFPB), via a rule change likely to be formally published in October, is proposing sweeping alterations to the late fees collected by credit card companies from delinquent borrowers.
Via Roll Call (emphasis added):
“Credit card late fees are required by law to be ‘reasonable and proportional’ to the cost the companies incur to collect the debt. The Federal Reserve established a threshold at which late fees would be assumed to meet the requirements of the law.
The CFPB’s February proposal would lower that threshold from $30 for the first late payment and $41 for subsequent late payments to $8….
Republicans criticized the proposal, saying credit card issuers would find other ways to recoup the cost of late payments that would make loans more expensive or elusive for low- and middle-income borrowers.”
These changes will negatively impact both consumers -- the constituency purportedly helped by the rule change -- and credit lenders.
Credit card companies partially model their businesses on collecting late fees. Should they be capped at $8 by the pending rule change, these companies, like any other, will be forced into a shift in their business model to compensate for the newly incurred risks.
As a result, industry analysts warn that what is likely to happen will be disastrous for consumers: potentially higher Annual Percentage Rates (APRs), greater scrutiny for new borrowers as standard risk assessments are updated, and tighter credit.
In addition to having adverse effects on all borrowers, the rule changes are unfair to responsible borrowers who repay their debts on time. In fact, the CFPB acknowledges in its own report that these borrowers are unlikely to benefit from the $8 late fee cap and, in fact, are likely to be financially injured due to higher maintenance fees intended to offset the revenue lost by the cap.
As Sen. Tim Scott, ranking member of the Senate Banking Committee, aptly noted, “there is no such thing as a free lunch.” Whatever revenue is lost by the $8 late fee cap, again, will be made up for by structural changes to the credit card companies’ business model.
Fortunately, pending Supreme Court litigation may provide a remedy to the CFPD’s out-of-control usurpation of rulemaking authority outside of the Constitutional confines of Congressional oversight.
Via the Epoch Times (emphasis added):
“While agencies often try to make themselves self-contained governments, sometimes Congress lends them a hand. The Consumer Financial Protection Bureau (CFPB) is the most dramatic example. When Congress created the bureau in 2010, it did everything it could to make sure that the CFPB answered to no one but itself.
Relevant to this lawsuit, Congress created an unusual funding mechanism for the CFPB. Whereas most agencies receive their money from congressional appropriations, the CFPB gets to take as much money as it wants (subject to a loose cap) directly from the Federal Reserve.
This makes the CFPB uniquely immune from congressional control. And like the SEC, the CFPB has both rulemaking and law enforcement powers, which can easily be used to advance the CFPB’s own agenda rather than Congress’. Indeed, the CFPB has faced significant criticism for slipping its congressional leash.”
We’ll see what the Supreme Court rules in the pending case. It may very well end up ruling against the extraconstitutional authority the CFPD has assumed for itself.
In the meantime, House Rep. Patrick McHenry, Chairman of the House Financial Services Committee, should exercise his constitutional oversight role to pump the brakes on the CFPD rule change -- at least until the Supreme Court hands down its ruling.
Rep. Roger Williams, Chairman of the House Committee on Small Business, might also examine the CFPB’s proposed rule change’s potential negative impact on American small businesses, already besieged as they are in the current economy.
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THE GREATEST TRANSFER OF WEALTH IN MODERN AMERICA OCCURRED DURING THE BANKSTER REGIME OF BARACK OBAMA, ERIC HOLDER AND 'CREDIT CARD' JOE BIDEN.
Don’t believe me? Let’s look at the evidence so far:
- Since the Obama years, the middle class has been under constant siege, all while the one-percenters have expanded their ranks. Inflation is now baked in and has only slowed, not diminished, as Biden officials callously gloss over it. Most Americans are paying large credit card debt with interest rates averaging 25%! The Destroyer in Chief must constantly tell you how well you are doing as you deplete your 401k to meet monthly obligations.
They’re Pushing Us Because They Assume We Won’t Push Back
I’m angry; you will understand why by the time I finish.
We are transitioning into what might be called the Post-America period. All the pillars of a free Republic are under attack. Forces are surging from all sides, led by Progressives who sense they have us on the run. During war, you send scouts out ahead to reconnoiter in advance of your main force. The Progressive scouts are sending messages “meeting light to no resistance.” Progressives are emboldened, believing that whatever they do is working, and their victory is in sight.
Let me explain why I hope they may be in for a rude shock. Everything the Destroyers (Progressives, Liberals, or even simply the Left) do depends on you giving up. They cannot actually take anything from you. You must give it up willingly. All the signs make them feel they can accomplish this monumental feat of brinksmanship without you fighting back.
Image by AI.
Don’t believe me? Let’s look at the evidence so far:
- Since the Obama years, the middle class has been under constant siege, all while the one-percenters have expanded their ranks. Inflation is now baked in and has only slowed, not diminished, as Biden officials callously gloss over it. Most Americans are paying large credit card debt with interest rates averaging 25%! The Destroyer in Chief must constantly tell you how well you are doing as you deplete your 401k to meet monthly obligations.
- Wilding (the act or practice of going about in groups threatening, robbing, or attacking others), is what one might refer to as the new American sport. It officially began in May 2020 with the murder of George Floyd. However, the Freddie Gray incident proceeded Floyd when we saw the first large-scale unrestrained looting of an American city in Baltimore in 2016, perhaps as a test case for what was to follow. Subsequently, looting, arson, and murder spread throughout the country as Baltimore’s Mayor set the tone: “Give those who wish to destroy space to do that….” Baltimore was the proving ground for Antifa, BLM, and Marxists, all of whom use such events to further their designs.
- Republicans and Democrats don’t play the same game, right? We have to talk about President Trump for a moment. Four indictments. The Grand Jury didn’t even vote on the last one before the charges were briefly posted on Fulton County’s website. Talk about jumping the gun! Don’t I recall Stacy Abrams saying her election was fixed and she was the real Georgia Governor? Or, Hillary Clinton who not only disputed her loss but has been outed as the architect of Russiagate, something that threw gas on the fire with Trump. How about Bleachbitting her server after receiving a subpoena? Nobody seems to mention that today!
- Trump was marked for destruction even before he came down that escalator in 2015. Trump never had a chance at any stage of the process. Trump targeted corrupt politicians, cronies, lazy federal workers, NATO malingers, and the political State in general by declaring their reign of ripping off taxpayers was over. And they hated him for it. They hated him for being pro-American and siding against the one-worlders and Globalists. It’s a wonder he wasn’t assassinated in office.
Now, a different kind of assassination is underway. Not just character assassination, but his mind, body, and soul are to be destroyed, eliminated, and nullified as a warning that no one should ever try again to do what Trump did to the power elite. This is no less than murder. Trump never stole money, fixed a ticket, engaged in political corruption, or other material crime other than being a loudmouth, which, thank God, is not a crime. Or is it?
In the end, the people pushing to destroy this man may themselves reap the whirlwind they have unleashed. As stated earlier, the Destroyers depend on your continued passivity. Government safety nets extend only so far. If you can’t pay your debts due to Bidennomics, some percentage of us will strike back at those who destroyed them financially. This is not promoting violence; this is speaking to human nature. You can only push people so far. Let that sink in.
Death by a thousand cuts renders some that I know hopeless, lost, and angry. Not me. If there are enemies of the State, it is those who harvest illegal votes, change election laws in the middle of a campaign, and don’t count the votes quickly to avoid serious doubt based on those delays and altered conditions. Unmonitored drop boxes, unpurged voter rolls, lack of signature matching, or voters that don’t have the cognitive ability to vote any longer did cast ballots. Our voting system needs a serious enema. ABC says, “Only 20% of the public says it’s very confident in the country’s elections”. God may forgive those bastards who stole our unparalleled free and fair elections legacy, but I won’t.
Our side has much more going for it than you might at first believe:
1. Red counties outnumber blue counties by almost 5 to 1, with six states and about 19 counties likely to be the key to deciding the next election. Much of our productive might, agriculture, military, warehouses, transportation systems, and, most importantly, patriots overwhelmingly live in red counties. The Silent Majority is alive and well-armed. Biden can’t count on the military and police to violate the civil rights of millions of Americans.
2. The Destroyers have bet everything on your own self-immolation. Leftism’s foot soldiers are emotionally driven. However, their leadership is pragmatic and will advance into gaps they give them or try to go around the law and us at other times. However, when they hit a brick wall, they will retreat. Count on them, saving their own skins at all costs.
3. If we fail to stand up to bullies, we will be plagued by them forever. How we push back is beyond the scope of this article. Each of us will find a different way to resist being consumed on a Progressive’s altar. The fundamental decision you must make is to act or sign your own death warrant. This is the simple calculus of life. Be the hunter or the prey.
Armageddon (a place I once visited) is not how we must wind up. “America, God shed his grace on thee” shall not perish from this earth. We need reminders occasionally to ensure we remember how fragile our Republic is and how profoundly perfect our Constitution was at its inception. America is worth defending, even if we must sometimes fight for it. Our duty and responsibility are to return our country to greatness through any means necessary to ensure our children prosper and that the world may again view us as a beacon of hope and a warning to other would-be bullies. The world is choosing sides right now. America’s weakness is apparent to many. We must not lose our dominant position in the world.
For this, I pledge my honor and my life. I hope you do as well.
God Bless America.
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