OAN Commentary by: Andrew Langer
Friday, March 28, 2025
President Donald J. Trump seems to have given Elon Musk’s Department of Government Efficiency the go-ahead to dismantle the Consumer Financial Protection Bureau, and Republican lawmakers have already introduced legislation to defund it.
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Good. The CFPB is a rogue “independent agency” run by unaccountable bureaucrats that was designed by none other than Sen. Elizabeth Warren (D-MA). Its sole achievements are driving up costs, stifling innovation, and treating Americans like children incapable of making their own informed decisions. It cannot be reformed. The only solution is to shut it down.
That’s why it’s so encouraging to see Republicans working to do just that — slowly but surely. They are stripping the agency of its powers one by one, starting with the most recent power the agency gave itself, which was capping credit card late fees.
Just weeks before the Biden administration turned in its White House keys, its CFPB sought to limit checking account overdraft fees to $5. This may sound like an innocent populist policy to help the less well-to-do, but the road to hell is paved with good intentions.
There is nothing inherently wrong with consumers choosing to make use of overdraft fees. If you must choose between spending hundreds of dollars you don’t have to fix your car today or losing your job because you can’t get to work tomorrow, incurring a $35 overdraft fee is a perfectly rational choice. But Biden’s regulators thought they knew better than you — and if they ultimately get their way, your card will simply decline the next time you make this choice.
Why? Because, if their policy goes through, banks will become more risk averse, resulting in either the mass debanking of low-income Americans or the elimination of overdraft services altogether.
Thankfully, Republicans, led by Sens. John Boozman (R-AR), Senate Banking Committee Chairman Tim Scott (R-SC), and House Financial Services Committee Chairman French Hill (R-AR) are saying “not so fast.” They have taken steps to overturn the rule through introducing a Congressional Review Act resolution. The Senate voted in favor of the repeal on March 27 and the House of Representatives is expected to follow suit on April 2.
In commenting on the CFPB’s overdraft cap, Sen. Scott said that “the Biden administration’s CFPB routinely targeted legitimate payment incentives and practices in pursuit of political headlines over sound policies and that limiting overdraft services in this manner “will push Americans to riskier financial products.”
Policy wise, Sen. Scott is of course correct, but more critical than being on the right side of this wonky legislative debate about overdraft fees is the simple fact that allowing this big-government rule to advance — in other words, letting the CFPB grow larger — would suck much of the oxygen out of Trump and Musk’s “defund the CFPB” movement.
That’s in no one’s interest. After all, the CFPB is one of the most fundamentally flawed agencies in Washington, D.C. today. It epitomizes government overreach, unaccountability, and regulatory excess more than perhaps any other.
Operating with virtually no oversight, it is if funded by the Federal Reserve rather than Congress and has insulated itself from the checks and balances essential to the American system of government. Its structure — a single director with immense power — undermines the separation of powers, making it a constitutional nightmare that has allowed unelected bureaucrats to routinely impose burdensome, anti-consumer regulations that would never have had enough political muster to pass if introduced in Congress.
In other words, CFPB is The Swamp.
The CFPB going after “the evil banks” might sound good its face — it may even be a good way to score a quick polling boost from working-class voters — but that doesn’t justify ignoring the clearly foreseeable harm its policies inflict on many of those same voters. And it certainly doesn’t justify giving the CFPB more legs at a time when Musk and Trump are making it finally limp along.
As Henry Hazlitt put it nearly 80 years ago, “The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences.”
It’s great to see Trump and Republicans in Congress doing just this. Their repeal efforts are coming not a moment too soon.
Don’t let the door hit you on the way out, CFPB employees. We won’t miss you.
(Views expressed by guest commentators may not reflect the views of OAN or its affiliates.)
Andrew Langer is the President of Institute for Liberty
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