In a recent Fox Business article, Megan Henney reported the Federal Reserve would be keeping interest rates at their current elevated levels, meaning Americans will continue to face higher payments on everything from mortgages to students loans. At the current range (5.25% to 5.5%), interest rates have risen to their highest levels since 2001 impacting all Americans in need of credit. However, instead of taking action to reduce credit burdens on consumers in these trying times, the Consumer Financial Protection Bureau (CFPB) is sticking their big government hands further into Americans’ pocketbooks with overreaching policies.
For example, as credit card rates have recently reached to over 20%, the Biden administration has done little to assuage borrowers’ concerns. Instead, Biden’s CFPB has capped late credit card fees at $8, a move that, on the surface, appears sensible, but like most CFPB policies, bears a host of unintended consequences. One of those consequences is that credit card users who make their payments on time will bear the brunt of the cost of delinquent borrowers. Already, this policy has faced valid challenges to its legality.
Of similar concern is the agency’s proposal to remove medical debt from credit reports. Though this policy might seem laudable, barring credit reports from including medical debt will only discourage patients from paying their medical bills. Americans will in turn face new expenses like higher upfront costs and increased prices as lenders attempt to recoup the losses of the debt that won’t be collected. This will impact low-income borrowers the most.
In times of economic hardship, federal agencies should be laser-focused on easing the strain on borrowers and consumers alike. Unfortunately, CFPB policies are creating more problems than they’re solving all to score some political wins in an election year. CFPB overreach is spiraling out of control.