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America First Report

DCNF(DCNF)—The lame duck Biden administration’s Consumer Financial Protection Bureau (CFPB) issued a rule in December to curb overdraft penalties in what experts told the Daily Caller News Foundation is an example of government overreach that will ravage low-income Americans.

The CFPB — an agency that is considered the brainchild of Democratic Massachusetts Sen. Elizabeth Warren — finalized the rule just weeks before President-elect Donald Trump takes office, with the aim of forcing banks to either cap overdraft fees at $5, far less than the $35 average, or to provide the overdraft as a form of credit rather than a penalty. While the policy’s stated aim is to increase transparency and protect American depositors, experts told the DCNF it will force banks to implement more stringent rules on bank accounts, limiting access to credit and financial services for low-income Americans, and pushing more borrowers to turn to payday lenders, who typically charge far higher interest rates.

“This is a classic case of government overreach with regulators having no idea how private business works,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “These new regulations would eliminate certain services and impose stricter rules on bank accounts predominantly held by low-income folks. If those people need an extension of credit because they don’t have sufficient funds to meet an immediate expense, they’ll be driven to even more costly payday lenders.”

While typical credit card annual percentage rates range from 15% to 30%, and personal loans are even lower, payday lenders often charge annual interest rates of anywhere from 300% to 500%, according to Mayo Employees Federal Credit Union. In 2022, 17% of households with checking accounts reported that they or someone in their family paid an overdraft fee, with households with incomes under $30,000 twice as likely to report at least one overdraft as those with incomes of $100,000 or more.

American household debt stood at a record high of nearly $18 trillion at the end of the third quarter of 2024, increasing by nearly $4 trillion from when President Joe Biden took office in the first quarter of 2021, according to the Federal Reserve Bank of New York. Credit card balances have also surged since the COVID-19 pandemic, with American households holding $1.17 trillion in credit card debt in the third quarter of 2024, up from $770 billion in the first quarter of 2021.

CFPB claims it has the legal authority to implement the regulation on the grounds overdrafts are loans and not penalties — an argument Erik Jaffe, partner at law firm Schaerr | Jaffe LLP, described to the DCNF as a “stretch.”

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“The CFPB was given authority to regulate certain circumstances of consumer lending. As a result, the question is whether or not an overdraft on your checking account constitutes a short-term loan,” Jaffe told the DCNF. “It seems like quite the stretch. Banks charge customers a fee on overdrafts. The fee is not interest, as the length of time you take to pay back the fee does not change how much you owe. Interest must have a time component to it. It’s not like banks are giving customers with overdrafts money over time. They are just doing a courtesy of not bouncing a charge and embarrassing the customer.”

Jaffe also pointed out that the CFPB contradicts itself by attempting to re-classify overdrafts as a form of lending, while simultaneously permitting banks to charge overdraft penalties so long as they are under a certain dollar amount: “If the only way the CFPB has power to regulate overdrafts is by treating it as a loan, then why do they get to regulate the amount of penalty? If they concede its a penalty, then it is not within their purview. There’s an internal inconsistency here.”

The overdraft rule incurred immediate legal pushback following its finalization, with the American Bankers Association (ABA) filing a motion in the Southern District of Mississippi’s Fifth Circuit for a preliminary injunction on Dec. 12. Jaffe suggested legal challenges like the one from the ABA could be successful, particularly after the Supreme Court voted 6-3 in June to overturn Chevron deference — a legal theory that provided unelected bureaucrats with significant leeway to interpret statutory ambiguities.

“We no longer defer to an agency when they say ‘if you squint really hard this statute means I can do whatever the heck I want,’” Jaffe told the DCNF. “This CFPB rule seems to smell a bit like that. The agency appears to be saying ‘if we squint just right, overdrafts look like loans, and so we have the authority to regulate them.’ The courts will take it upon themselves to determine if this is the most natural reading, and will likely conclude it is not.”

Outside of the courts, Republican lawmakers have taken aim at the rule, claiming it will limit access to credit and describing it as an example of “midnight rulemaking” by the outgoing Biden administration.

“As I’ve said repeatedly, lawful and contractually agreed upon payment incentives promote financial discipline and responsibility and protect access to important financial services,” incoming Senate Banking Committee Chairman Tim Scott of North Carolina wrote following the finalization of the rule on Dec. 12. “With just over a month until the next administration takes over, Director [Rohit] Chopra should never have finalized this rule in the first place, and I look forward to working with the next CFPB Director to advance policies that prioritize consumers over political talking points.”

Incoming House Financial Services Committee Chairman French Hill of Arkansas echoed Scott’s sentiment in a Dec. 23 statement: “We told federal agencies — including the CFPB — to put their ‘pens down’ and stop all midnight rulemaking. Director Chopra blatantly disregarded our request by finalizing this rule. Capping overdraft services is another form of government price controls that hurts consumers who deserve financial protections and greater choice.”

Chopra is a longtime ally of Democratic Massachusetts Sen. Elizabeth Warren, helping her establish the CFPB following the passage of the 2010 Dodd-Frank financial reform law. Warren was instrumental in creating the CFPB, with former President Barack Obama describing the agency as “Elizabeth’s idea.”

“I also want to thank Elizabeth Warren not only for her extraordinary work standing up the new agency over the past year, but also for her many years of impassioned leadership, and her fierce defense of a simple idea: ordinary people deserve to be treated fairly and honestly in their financial dealings,” Obama said in a July 2011 speech touting the then-fledgling agency. “This agency was Elizabeth’s idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country.”

Peter Earle, senior economist at the American Institute for Economic Research, told the DCNF the rule was the latest in a long line of “regulatory overreach” from the Biden administration.

“Capping overdraft fees by regulatory fiat is yet another example of regulatory overreach from the Biden administration, as it interrupts the pricing mechanism that reflects the costs and risks of providing overdraft services,” Earle said. “It’s not the first time, by far, that the outgoing administration has assumed that government knows better than private enterprises, consumers, and the price system, undermining the voluntary, cooperative commerce that drives competition and innovation.”

The CFPB and Warren’s office did not respond to requests for comment.

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Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead

The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.

Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.

There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.

Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.

Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.

Secured Wealth

Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.

It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.

There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.

As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.

Lots of Potable Water

One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.

Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.

For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.

Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.

Pharmaceuticals and Medical Supplies

There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.

Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.

If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.

Energy Sources

The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.

Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.

Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.

Don’t Forget the Protein

When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.

Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.

Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.

Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.

Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.

Prepare Without Fear

With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.

America First Report