CFPB Putting the “Lame” in “Lame-Duck”

If the lame-duck Consumer Financial Protection Bureau (CFPB) is suffering from senioritis, it certainly has shown no signs of it. Far from kicking its feet up, remembering all the good times it had harassing American consumers and businesses, the agency refuses to halt its economically destructive mischief-making. This includes a newly announced lawsuit against three major banks, in the midst of a government shutdown fight. This is where the administration is dedicating its time and resources.

In a month, new leadership will begin the work of undoing the Biden administration’s long string of abuses and overreaches. Any projects begun now are less acts of policymaking than of messaging. They will, no doubt, be terminated without issue. This hasn’t discouraged Director Rohit Chopra and his team, however. To borrow a phrase applied originally to the agency’s intellectual mother, Elizabeth Warren: Nonetheless, the CFPB persisted.

On Wednesday (December 18), the CFPB dispatched a missive, targeting credit card rewards programs. To conclude 2024, the agency has taken one final, feeble, futile action against an industry upon which most Americans – especially low- and middle-income Americans – depend for much-needed financial services. The agency frets that credit card issuers have taken to deceiving their customers and devaluing their points programs.

In its myopia, the CFPB threatens an on-the-whole functional and successful industry to gratify its own technocratic proclivities. The agency admits, “In 2022, consumers earned more than $40 billion in rewards from major general- purpose credit cards, more than a 50 percent increase from 2019.” Not shabby. Yet, if one were to listen to Chopra, one might think credit card issuers have embarked on a grand campaign of fraud and deception. Of course, they haven’t.

Nor does the CFPB’s data lend any aid. As the Electronic Payments Coalition noted, “The CFPB’s report issued this May found 1,200 complaints related to reward programs out of a total 253 million reward cards. This same report also shows credit card rewards actually increased in value.” That’s one complaint for every 210,833 cards. Again, not shabby – and nothing like the kind of crisis a lame-duck agency would need to address.

This all follows newly finalized rules capping overdraft fees (price controls by a different name) and foisting its authority on firms that offer digital-payments services. Both came after November’s election, and both are likely to fall by way of the Congressional Review Act once the new majority takes office in January.

Then came the newest suit, which alleges misconduct concerning peer-to-peer payment systems. The agency is throwing the kitchen sink at an entire industry on its way out the door. The primary product of the CFPB’s strategy is not consumer protection but ever-tightening government control of industry. These are the final moments of an administration that has worked from the assumption that America’s business community must be micromanaged to avoid large-scale abuses. It is an impoverished – and deeply wrong – view of economics. At the very least, the CFPB is proving the painful truth of Yogi Berra’s dictum: It ain’t over till it’s over.

“The CFPB’s actions arrive during the busy end-of-year shopping and travel season,” the CPFB notes in Wednesday’s press release. It’s true enough, but the incongruity is lost on the agency. Credit card rewards fund many Americans’ holiday-season spending — from credit-card points that pay for airfare to cashback that pays for gifts. In hounding credit card issuers, the CFPB keeps pace with the Grinch.

It’s the end of year and the end of the current CFPB leadership’s tenure. Go home to your families – and leave American consumers and taxpayers in peace to do the same.