FOR IMMEDIATE RELEASE
March 6, 2024
CONTACT
Logan Elizabeth Padgett
850-386-3131
TALLAHASSEE – Shortly after the Biden administration released its rule to expand the government’s price controls over credit card late fees, The James Madison Institute released the following statement:
Milton Friedman once said, “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” This is what will happen if the CFPB succeeds in bringing the government’s current price cap on credit card late fees ($32) all the way to $8. Like most feel-good policies, this one — based on fantasy political math that is not grounded in reality — will end in ruin.
Responding to this new government tape, banks (especially the small community banks that many Floridians rely on) will almost assuredly increase their fees and reduce their minimum account balances. The result will be an increase in income inequality despite the Biden administration promising to mitigate wealth distribution and the largest Wall Street banks increasing in size. Meanwhile, the small community bank across the country will dissolve, shrink, and consolidate even more than they have over the last decade.
Rather than try to beat the free market with yet another myopic big-government proposal, the Biden administration should end its tax-and-spend inflationary policies and let the markets do their thing.
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The James Madison Institute is a 501(c)3 organization dedicated to the ideals of limited government, economic freedom, federalism and individual liberty coupled with individual responsibility. The institute conducts research on such issues as criminal justice, health care, taxes and regulatory environments.
