While there’s a ton of opportunity to advance free markets and human flourishing right here in Louisiana, we can’t forget to pay attention to what’s going on in Washington (and boy is there a lot going on!). This will be the first in an ongoing series, Liberty vs. Leviathan, highlighting major federal issues, particularly those that deal with administrative state overreach.

The Consumer Financial Protection Bureau (CFPB) is at it again. Their latest rule, finalized in December 2024 and slated to start in October 2025, puts a $5 cap on overdraft fees for banks with over $10 billion in assets—or forces them to peg fees to costs and add credit-style disclosures. It’s being sold as a big win for consumers, a crackdown on those pesky “junk fees.”

The reality: this is nothing more than big government administrative overreach. For the Pelican Institute, where we’re all about limited government and free markets, this is a glaring signal that Congress needs to intervene and take back the reins.

The Wall Street Journal’s Editorial Board called the proposed rule a “Rohit Chopra production.” CFPB Director Chopra said he was closing a “loophole” from 1969, back when overdraft was just a friendly nudge for delayed checks. Fast forward to today—debit cards and instant payments rule the game—and that excuse feels pretty thin. Instead of letting Congress sort out what’s fair, the CFPB went full steam ahead, branding overdraft a “massive junk fee harvesting machine” and rewriting the playbook without a vote. That’s not consumer protection; it’s bureaucracy flexing its muscles.

The Cato Institute’s Norbert J. Michel digs deeper and points out this rule doesn’t even line up with the Truth in Lending Act (TILA), the law it’s supposedly enforcing. Historically, TILA exempted overdraft fees from finance-charge disclosures because they weren’t traditional loans with repayment schedules. By reversing this without Congressional input, the CFPB risks destabilizing a $5.8 billion industry—down from $15 billion pre-pandemic, thanks to voluntary bank reforms.

Michel’s warning about “massive unintended consequences” isn’t just talk—it will lead to less credit access for folks who need it most, especially right here in Louisiana. People who rely on overdraft protection to make ends meet—especially for essentials like gas and groceries—could lose this safety net. What’s more, fees won’t simply disappear; instead, they will be applied elsewhere as a means of recovering lost revenue—pushing vulnerable individuals toward worse alternatives like payday lenders and loan sharks. That’s the kind of real-world impact the administrative state often glosses over.

This is where Congress comes in. The CFPB’s funding, insulated from appropriations through the Federal Reserve, shields it from accountability. Its broad mandate under the Dodd-Frank Act—meant to ensure fair financial markets—has morphed into a license for unchecked rulemaking. Lawmakers can use oversight hearings to probe the CFPB’s legal authority, demand cost-benefit analyses, and explore legislative fixes that balance consumer needs with market dynamics. The Trump administration and conservative-led efforts to repeal this rule signal political will, but Congress must act decisively to restore its primacy over policy.

The Pelican Institute stands for government that respects limits. The CFPB’s overdraft rule is a textbook case of bureaucratic excess—well-intentioned, perhaps, but poorly executed and unmoored from democratic consent. Congressional oversight isn’t just an option; it’s a necessity to safeguard liberty and ensure the administrative state serves, rather than dictates to, the American people.