This is what happens when bureaucrats who have never run a business make rules for the rest of us
The Consumer Financial Protection Bureau is a bureaucracy created out of thin air by socialist Elizabeth Warren. Democrats pretend the bureau is just there to protect consumers which is B.S. Their budget is not controlled by Congress or anyone. They are funded by the Federal Reserve, which is losing hundreds of billions per year. Most of what they do is protecting their own jobs, and they are very highly paid people. The bureau is just another layer of regulators to whom private businesses have to cater.
The average pay of a CFPB employee in 2023 was $134,723, which is over 70% higher than the median income of a family of four in the U.S. ($78,171), and higher than other government workers:
The average employee salary for the Consumer Financial Protection Bureau (CFPB) in 2023 was $134,723. This is 87.8 percent higher than the national average for government employees and 74.7 percent higher than other federal agencies. There are 1,637 employee records in 2023 for [the] Consumer Financial Protection Bureau (CFPB).
This does not even include their massive pensions and benefits packages. They get raises whether their employer is making money or not.
The bureaucrats put out talking points, and most of the media just repeats what they are told, because they also have no business experience, with a new exampleseen below:
Overdraft fees could be capped at $5 under new federal rule
Banking customers could save up to $5 billion per year on overdraft fees under a new rule finalized Thursday by the Consumer Financial Protection Bureau.
Rohit Chopra, the director of the government watchdog in charge of protecting the public’s finances, told ABC News the final rule would cap overdraft fees at $5 for many customers.
That would mark a significant savings from the typical $35 fee that millions of customers pay when they withdraw more money from their checking accounts than they have available. The CFPB estimated the new rule could save the typical household $225 per year.
‘Big banks love overdrafts. It is easy profit for them, but it is punishing for so many Americans, especially those who live paycheck to paycheck,’ Chopra told ABC News in an exclusive interview.
I am a CPA who worked for a family that owned seven smaller banks, although one grew to having $600 million in assets.
First off, they say that banks “love overdrafts” which implies that they love covering bad checks—but they don’t. People that repeatedly write bad checks are bad customers for the bank. If the bank has to repeatedly cover bad checks they will close the account because they are a pain. The bank needs deposits to make loans and investments. If a customer has a negative account balance, the bank doesn’t want them.
If the fee is lowered to $5, more will be incentivized to write bad checks, and that would destroy their credit rating. The bank will just return the check to the payee, and they will charge the customer, and no one will accept their checks.
Once a customer is known for writing bad checks and having them returned, they will be blocked at other institutions from opening an account.
Writing bad checks is also a crime, either a misdemeanor or a felony depending on the amount of the checks. Of course, Democrats don’t seem to care about crimes. They are anti-business.
Free checking accounts will be taken away from other customers who don’t write bad checks, but these CFPB bureaucrats and Biden administration officials don’t care. They got their talking points out that they are saving customers $5 billion per year, and this will save the typical household $225 per year. That is obviously not true. The typical household does not write bad checks, so it will save them zero—but it’s likely to cost them if they’re now suddenly paying for the services for which banks typically don't charge.
The CFPB, under Obama, also had a slush fund where it shook down corporations and gave some amounts back to political supporters instead of victims. There were also slush funds at EPA and the Justice Department.
JPMorgan Chase warned the CFPB and Biden administration that they would start charging for services that were previously free if this rule went through, and that these fees will hurt the poor and middle class the most (people about whom the Democrats only pretend to care). From a Wall Street Journal article:
[Marianne] Lake said Chase is planning to pass on the costs of higher regulation and charge customers for a number of now-free services, including checking accounts and wealth-management tools, if the rules become law in their current form. She expects her peers in the industry will follow suit.
‘The changes will be broad, sweeping and significant,’ Lake said. ‘The people who will be most impacted are the ones who can least afford to be, and access to credit will be harder to get.’
It is a true shame that most people posing as journalists just repeat what they are told instead of doing independent thinking and research, no matter what the subject is.
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