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New Study Shows How Overregulating Short-Term Lenders Harms Consumers

We at CFIF have consistently highlighted the peril of federal, state and local government efforts targeting the short-term consumer lending sector.

Less than two years ago, we specifically sounded the alarm on a New Mexico law artificially restricting interest rates on short-term consumer loans.

Well, a new study entitled "A New Mexico Consumer Survey:  Understanding the Impact of the 2023 Rate Cap on Consumers" that surveyed actual borrowers confirms our earlier warnings:

Key findings include:

•Short-term,small-dollar loans help borrowers manage their financial situations, irrespective of the borrower’s income.

•The rate cap has failed to improve the financial wellbeing of New Mexicans, specifically those who had previously relied on short-term, small-dollar loans.


November 27, 2023 • 03:57 PM

Liberty Update

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California’s Water Rationing: A Man-Made Disaster Print
By Ashton Ellis
Wednesday, April 08 2015
So instead of conserving water to benefit taxpayers, California officials literally flushed 2.6 million acre-feet of fresh water into the ocean.

California Governor Jerry Brown has announced he will issue an executive order that mandates statewide water rationing.

“This executive order is done under emergency power,” Brown, a Democrat, said while appearing on ABC’s This Week. “It’s requiring action and changes in behavior from the Oregon border all the way to the Mexican border. It affects lawns. It affects people’s – how long they stay in the shower. How businesses use water.”

Brown’s order will also enhance the power of government regulators to punish those using more than their allotment.

“Each water district that actually delivers water – water to homes and businesses, they carry it out,” Brown explained. “We have a state water board that oversees the relationships with the districts. Hundreds of them. If they don’t comply, people can be fined $500 a day. Districts can go to court to get a cease and desist order. The enforcement mechanism is powerful. In a drought of this magnitude, you have to change that behavior and you have to change it substantially.”

The move is an unprecedented restriction on access to water in California. To justify his decision, Brown and other environmentalists point to a five-year drought that has left the state’s reservoirs and snow packs at historically low levels. Without sufficient amounts of water to draw on in the summer months, government-enforced behavior modification is the order of the day.

Take a look at Long Beach to see what’s coming. The city’s Water Department uses so-called ‘smart meters’ to track water consumption by private businesses. Every time a sprinkler system turns on the department is alerted. If the amount of water used exceeds what regulators think is appropriate, they dispatch agents to the property to collect evidence of infractions. Hefty penalties follow. A Long Beach spokesman says smart meters could be used to police homeowners as well.

To be sure, the fifth year of California’s current drought is the immediate cause of the crisis. The state’s snow pack is five percent of its normal height, meaning that in the summer months there will be hardly any water melting and rushing down the state’s aqueduct system to service farmers and municipalities. Historically low amounts of rainfall over the last few years have failed to fill man-made lakes and reservoirs. As the numbers shrink, the only reasonable policy is to empower unelected regulators to monitor and fine thirsty taxpayers.

At least, that’s what Brown and California’s environmental lobby want people to believe. The truth is much more damning.

Since the 1970s, when Brown took his first turn as governor, California greens have successfully halted construction on new water storage facilities. In other words, while the state’s population has doubled since the 1960s, there have been no major water retention projects completed.

To make matters worse, the water that remains doesn’t all go to humans. The Wall Street Journal explains that the state’s “environmental regulations require that about 4.4 million acre-feet of water – enough to sustain 4.4 million families and irrigate one million acres of farmland – be diverted to ecological purposes. Even in dry years, hundreds of thousands of acre feet of runoff are flushed into San Francisco Bay to protect fish in the Sacramento-San Joaquin River Delta.”

Then comes the kicker: “During the last two winters amid the drought, regulators let more than 2.6 million acre-feet out into the bay.”

So instead of conserving water to benefit taxpayers, California officials literally flushed 2.6 million acre-feet of fresh water into the ocean. How progressive.

While it’s true that California’s weather has been abnormally dry, the water shortage that is being used to justify Jerry Brown’s rationing program is primarily a man-made disaster.

Notable Quote   
"The Biden administration has outpaced other recent presidents in issuing significant regulations that place a financial burden on taxpayers, according to a report from the Competitive Enterprise Institute.Under President Joe Biden, the federal government completed 89 economically significant rules in 2022, defined as those with at least a $100 million economic impact, which is higher than any point…[more]
— Will Kessler, Daily Caller News Foundation
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