Economics

Biden Admin New Overreach Targets Checking Accounts

The Biden administration’s Consumer Financial Protection Bureau (CFPB) “issued a rule in December to curb overdraft penalties” in a way many experts described as “government overreach.”

The CFPB rule aims to force banks to cap overdraft fees at $5 — the average is currently $35 — or provide overdrafts as a type of credit rather than a penalty against customers, reported DCNF. The policy’s publicly stated goal is to “increase transparency and protect American depositors,” experts told the outlet that it will actually force banks to create stricter rules around their accounts, which could limit access to financial services and credit to low-income Americans. In turn, this will likely push more borrowers towards payday lenders, which often push a very high interest rate.

Payday lenders can charge rates upwards of 300-500%, the outlet continued, noting that in 2022, 17% of households with checking accounts reported at least one family member paying an overdraft fee. American credit card loan defaults are currently at the highest rate in 14 years, with the crisis likely to hit the same bottom third of consumers the new overdraft rules will likely target.

Legal Challenges

CFPB is claiming it can implement the regulations “on the grounds overdrafts are loans and not penalties.” Schaerr | Jaffe LLP partner Erik Jaffe called the CFPB argument of “legal authority” a “stretch.”

“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 explained to 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.”

The ruling was hit with instant legal pushback, most notably from the American Bankers Association (ABA) filing a motion for a preliminary injunction in the Southern District of Mississippi’s Fifth Circuit. Jaffe believes this, and other motions, could be successful after the Supreme Court voted 6-3 in June to overturn Chevron defense that “gave federal agencies broad authority to implement regulations under ambiguous language unless Congress had explicitly prohibited such rules,” The Federalist said at the time. (LEARN MORE: Supreme Court Delivers Major Blow To Federal Agencies)

Republicans Take Aim

Republican lawmakers have also “taken aim at the rule,” noted DCNF, particularly focusing on how it will limit access to credit.

“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 said in Dec. “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.”

“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,” incoming House Financial Services Committee Chairman French Hill of Arkansas stated later in the month.

Who Pushed For This Policy?

Chopra was described by DCNF as a “longtime ally of Democratic Massachusetts Sen. Elizabeth Warren,” who helped establish CFPB shortly after the passage of the Dodd-Frank financial reform law in 2010.

“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,” former President Barack Obama said of Warren’s work in July 2011.

Read More at Million Voices 

A new analysis of the Best Cities for Jobs in 2025 ranks Michigan’s largest nearly dead last. The personal finance website WalletHub compared more than 180 U.S. cities across 31 key indicators of job-market strength – from opportunities per job seeker, to employment growth, to monthly average starting salary – to determine the best for finding work.

The analysis produced an overall rank for 182 cities, as well as a job market rank and socio-economics rank, and Detroit ranked among the worst in all three. Overall, the Motor City came in 181st out of 182, one spot ahead of last place Memphis, Tenn. Detroit ranked 176th for job market and 178th for socio-economics.

For the job market, WalletHub considered indicators like job opportunities, employment growth, starting salaries, unemployment, job security and satisfaction, full time employment, and workers in poverty, among others. Memphis was the worst, followed by Detroit, San Bernardino, Calif.; Augusta, Ga.; Baton Rouge, La.; Gulfport, Miss.; Bakersfield, Calif.; Huntington, W. Va.; Stockton, Calif.; and Shreveport, La. Detroit’s persistently high unemployment is due in part to bigger problems in Michigan under Gov. Gretchen Whitmer. In just the last year, 36,000 more Michiganders became unemployed, marking a 17.3% increase since November 2023.

Read the Full Story at The Midwesterner

The number of new Michigan unemployment claims swelled by more than 7,800 last week over the week prior, significantly outpacing every state in the nation. In total, the state estimates 19,349 Michiganders filed new unemployment claims during the week of Christmas, or 7,810 more than the 11,539 that filed claims during the previous week, according to the U.S. Department of Labor’s weekly unemployment insurance claims report.

That growth in new claims dwarfs all states and the District of Columbia, with the next closest states of New Jersey at 5,637 additional claims, and Pennsylvania at 5,331. Across the U.S., the net increase in initial unemployment claims was 7,441, as declining unemployment in 26 states was outpaced by increases in the rest. In November, about 9,000 Michiganders lost their jobs as the state’s unemployment rate ticked up for the eighth straight month, growing at double the national average.

State officials in November reported Michigan’s seasonally adjusted unemployment rate jumped two-tenths of a percentage point from September to come in at 4.7% for October, then later revised that figure to 4.6%. The Michigan Department of Technology, Management and Budget reports Michigan’s unemployment rate has since swelled to 4.8%, jumping another two-tenths of a percentage point as the national unemployment rate increased by 0.1% in November. It’s now at the highest point since November 2021, when the state was still reeling from government imposed pandemic restrictions. 

Read the Full Story at The Midwesterner 

Michigan taxpayers gave General Motors $600 million to create thousands of jobs at an Ultium Cells battery plant near Lansing, now they’re waiting to see if a South Korean company fulfills that obligation. GM announced earlier this month it’s backing out of the joint venture with LG Energy Solution that was funded in part by the largest taxpayer incentive package in state history, but neglected to mention it already pocketed the cash.

“State records obtained by The Detroit News indicate the entire performance-based grant was paid out by the Michigan Treasury Department to GM and its partner in an EV battery plant between June and September 2023, more than a year before the Detroit automaker announced Dec. 2 that it would sell its stake in the Lansing area battery plant that had received part of the grant,” the news site reports.

The 2022 incentive package, the first approved through a newly created Strategic Outreach and Attraction Reserve fund run by the Michigan Economic Development Corporation, paid out a record $666 million for the Ultium Cells plant and to transition GM’s Orion Township assembly plant to produce all-electric pickups. The agreement was predicated on GM’s promise to invest about $4 billion in Orion Township and $2.5 billion in Ultium Cells, and create about 3,200 jobs – 1,840 in Orion Township and 1,360 at the Ultium Cells plant.

Read the Full Story at The Midwesterner

President-elect Donald Trump vowed to “deliver the largest tax cuts in the history of our country” as he hailed Sunday as “the 7th Anniversary of the Trump Tax Cuts becoming Law.”

“Today is the 7th Anniversary of the Trump Tax Cuts becoming Law,” Trump wrote in a Sunday morning Truth Social post before he was slated to speak at a salute to Arizona gathering for Turning Point Action, “‘Happy Birthday!’

“Next year, we will deliver the largest Tax Cuts in the History of our Country,” he added.

“MAKE AMERICA GREAT AGAIN!”

Today is the 7th Anniversary of the Trump Tax Cuts becoming Law. “Happy Birthday!” Next year, we will deliver the largest Tax Cuts in the History of our Country. MAKE AMERICA GREAT AGAIN!

Donald Trump Truth Social 09:18 AM EST 12/22/24

— Donald J. Trump Posts From His Truth Social (@TrumpDailyPosts) December 22, 2024

Many of the provisions of the Tax Cut and Jobs Act signed by Trump in 2017 are scheduled to expire at the end of next year.

This means that more than $4 trillion in tax increases will take effect Jan. 1, 2026, charging next year’s Congress and administration with the hefty task of grappling with the tax hikes.

Many of the provisions impacting businesses, including pass-through entities, are set to expire between 2025 and 2028.

According to Americans for Tax Reform’s Grover Norquist, the expiration of the cuts has the markets sinking as Congress is speaking out against extending the Trump tax cuts next year.

“I think one of the dangers that people are looking at is that the tax cut may be delayed; it may get stopped,” Norquist said.

“We’re one bad car accident away from having Democrat control of the House of Representatives, which means a $4 trillion tax increase.”

“That’s a lot of uncertainty.”

Earlier this year, Trump suggested abolishing the federal income tax for American families.

During a visit to a barbershop in the Bronx, Trump was asked if there was “a way to eliminate federal taxes.”

Citing the policies of the late 1800s, when income tax funds were replaced by new trade tariffs, the former president hinted the country could go back to a time “when we were a smart country” and “relatively the richest it ever was.”

“It had all tariffs — it didn’t have an income tax,” said Trump.

Now we have income taxes, and we have people that are dying.”

“They’re paying tax, and they don’t have the money to pay the tax,” he added.

Trump saidsaid America was becoming so rich during the 1890s that “we had to set up committees, blue ribbon committees (on) how to spend our wealth—we had no idea how to spend it; there was so much money.”

“Then we went to the income tax system and the rest is sort of history,” said Trump.

Read More at the Daily Fetched

Michigan lawmakers are doling out taxpayer cash to corporations faster than any state in the nation, and it’s not even close. “From 2018-2023, Michigan spent twice as much on incentives as the #2 state,” David Guenthner, the Mackinac Center for Public Policy’s vice president for government affairs, posted to X Thursday, along with the data to back up his claim. “6x Texas, 8x Florida, 12x Tennessee. “All of those states are lapping Michigan in job creation and population growth,” he noted. “Because MI pols would rather subsidize @GM & @Ford than fix the damn roads.”

An attached chart from IncentivesFlow, “a Service from FDI Intelligence,” shows Michigan spent $2.663 billion in taxpayer-funded economic incentives over the six-year time frame. South Carolina, the next closest state, spent $1.6 billion, followed by California at $1.3 billion, Indiana at $1.215 billion, and Oregon at $1.013 billion.

The spending data follows just days after the Mackinac Center released a report titled “Front Page Failures” that exposes the futility of Michigan’s taxpayer-funded economic incentives. “Front page new stories in Michigan’s largest newspaper from 2000 to 2020 announced the creation of a total of 123,060 new jobs,” according to the report. “State reports show these deals created just 10,889 jobs in the end, a success rate of just 9%. Only one in 11 of the announced jobs in these front page stories ever came to fruition.”

Read the Full Story at The Midwesterner

Michigan’s per capita income is now “the lowest we’ve ever been,” putting the state on track to become the third poorest in the nation by 2045.

Recent data from the U.S. Bureau of Economic Analysis pegs Michigan’s per capita income – total income divided by the number of adult residents – at $61,144 in 2023. The figure is dead last among Great Lakes states and 40^th nationally, more than 12% below the national average of $69,815, Bridge Michigan reports.

Since Gov. Gretchen Whitmer was re-elected in 2022, per capita income has reached “the lowest we’ve ever been,” Lou Glazer, president of the think tank Michigan Future Inc., told the news site. He attributed the “enormous collapse” to a lack of high-wage jobs, a perspective shared by Citizens Research Council of Michigan Senior Research Associate Bob Schneider.

Read the Full Story at The Midwesterner

Vice President and presidential hopeful Kamala Harris must believe Americans have just fallen out of a coconut tree. The woman lies more often than she breathes, and her latest whopper brought out some big guns who offered a correction. 

During the September 10 debate with Donald Trump, Harris lied repeatedly, stating as fact long-debunked lies about things she claimed Donald Trump has done. She lied about him praising neo-Nazis at a Charlottesville rally (the “fine people” lie), and she lied about Trump threatening a “bloodbath” if he does not win the presidency (Trump spoke metaphorically about the auto industry). 

But she also lied about herself, or, more specifically, about praise for her alleged economic plan, saying that her vision for the future was supported by economists everywhere. Harris continued this brazen deception during a Boomer-celebrity-packed Zoom call—of all things—hosted by Oprah Winfrey. During the “Unite for America” event, Harris claimed that Goldman Sachs, Moody’s, and the Wharton School of Business, along with “16 Nobel laureates” have “collectively determined after analyzing our plans [that] mine would strengthen the economy, his would weaken it.”

Harris must never have faced any consequences for her lying, because she seems absolutely fearless in telling the exact opposite of the truth. 

Newsweek contacted the Wharton school for comment. An unidentified spokesperson said the school “did not find a positive impact on the economy from her plan in any future year.” By contrast, the staffer said, Trump’s plan would increase Gross Domestic Product “for a few years” but would lower it at the end of a ten-year cycle. 

And what about Goldman Sachs? CEO David Solomon said Harris was really reaching when she said a report from his firm backed her economic plan. He said the report was from an independent analyst first of all, and that it found a tiny difference in predicted outcome between the economic plans of Kamala Harris and Donald Trump. How small? Two-tenths of 1 percent. 

Let’s see if social media users were surprised.