Opinion – Elon Musk wants to ‘delete’ many Americans’ financial lifeline

“Elon Musk — who, along with Vivek Ramaswamy, has been tasked by President-Elect Trump with running a new Department of Government Efficiency — posted on his platform X that he wants to “Delete CFPB,” referring to the Consumer Financial Protection Bureau. The agency, Musk said, was part of a problem of “too many duplicative regulatory agencies” in Washington. But there are no other agencies in the federal government returning money to Americans’ bank accounts in the way the CFPB does.
Since its founding, the agency has returned more than $19 billion in cash to people who have been scammed by financial institutions, including predatory payday lenders and even some of the largest banks in the country. It has done so under Republican and Democratic presidents, including major actions against Wells Fargo and Equifax during President Trump’s first term in office, which, combined, returned $425 million to consumers. (Those actions both began under the Obama administration, but Trump’s CFPB directors oversaw the execution of those fines.)”

https://finance.yahoo.com/news/opinion-elon-musk-wants-delete-143000169.html

Capping Overdraft Fees Will Hurt Some of the People It Is Supposed To Help

“Large banks will have to cap overdraft fees charged when customers try to withdraw more money than is available in their accounts, the CFPB announced Thursday. Under the new rule, which has been in development since early this year, banks will be allowed to charge no more than $5 for overdraft fees, or will have to set fees to ensure they are only covering costs and not earning a profit from them.
There are currently no limits on those fees, and the average overdraft fee is about $35, according to the CFPB. The bureau estimates that the new rule will save consumers about $5 billion annually.

But there will certainly be some unintended consequences to the change, as there are any time a price control—which is, broadly speaking, what this rule amounts to—is mandated. Rather than charging overdraft fees to cover an excessive withdrawal, banks may revert to the older practice of simply declining those transactions.

As Jon Berlau, a senior fellow at the Competitive Enterprise Institute, explained to the CFPB in 2022, the introduction of overdraft fees was originally a consumer-friendly development that was initially offered only to bank’s wealthier clients but eventually became commonplace.

Indeed, many banking customers would likely prefer paying a nominal fee versus the frustration of not being able to pay for some vital purchase. That choice might soon be taken away.”

https://reason.com/2024/12/12/capping-overdraft-fees-will-hurt-some-of-the-people-it-is-supposed-to-help/

Why the Consumer Financial Protection Bureau’s Funding Structure Is Unconstitutional

“A three-judge panel on the 5th Circuit Federal Court of Appeals ruled this week that the CFPB’s structure is unconstitutional because Congress has no control over the agency’s budget, which is funded entirely by the Federal Reserve. Under the terms of Dodd-Frank, the CFPB is entitled to receive a budget totaling up to 12 percent of the Federal Reserve’s annual operating expenses, and the Federal Reserve is not allowed to refuse the CFPB’s requests for funding.

“Congress’s decision to abdicate its appropriations power under the Constitution, i.e., to cede its power of the purse to the Bureau, violates the Constitution’s structural separation of powers,” Judge Cory Wilson wrote in this week’s ruling.”

“”Congress did not merely cede direct control over the Bureau’s budget by insulating it from annual or other time-limited appropriations. It also ceded indirect control by providing that the Bureau’s self-determined funding be drawn from a source that is itself outside the appropriations process—a double insulation from Congress’s purse strings that is ‘unprecedented’ across the government,” Wilson wrote in the court’s ruling. “Even among self-funded agencies, the Bureau is unique. The Bureau’s perpetual self-directed, double-insulated funding structure goes a significant step further than that enjoyed by the other agencies on offer.””