In today’s can’t-miss episode of the Get Out of Debt Guy podcast, Steve Rhode (the Old Get Out of Debt Guy) and Damon Day (the New Get Out of Debt Guy) unpack some jaw-dropping changes quietly pushed through by Congress and the Consumer Financial Protection Bureau (CFPB).
A previously closed banking loophole has now been reopened, giving big banks the green light to behave just like payday lenders. For the average consumer—yes, people like you—this means your bank fees could soon skyrocket, trapping you in a cycle of costly debt.
And there’s more: the CFPB has just rolled back important protections, effectively telling payday lenders, title loan providers, and companies offering high-interest installment contracts to go ahead and take the money and run.
If you use a bank account, have ever paid an overdraft fee, or rely on installment loans, these changes directly impact you. Join Steve and Damon as they expose what’s really happening, why it matters, and most importantly, how you can protect yourself and your finances.
Listen to this critical episode now—and stay informed to keep your money safe!
Listen now on your favorite podcast platform!
Transcript
[0:00] Hey friends, it’s Steve here, the old Get Out of That Guy, and welcome back to the show as always. And today, I’m joined again by my partner in crime and truth-telling, the new Get Out of That Guy, Damon Day. Say hello, Damon. Hello, Damon. You’re always so enthusiastic.
[0:18] I’ve had my coffee. Now, hold on tight, because what we’re about to unpack isn’t just shady. It’s a full-blown profit trap. Congress just brought back a banking loophole that was previously eliminated for being too abusive. But now it’s back. And it’s going to cost a lot of money. And if that wasn’t troubling enough, the Consumer Financial Protection Bureau, the very agency, meant to protect people like you and me. Just gave payday lenders and title loan companies and those people that give out high interest installment contracts. The CFPB just gave them the green light to grab your money and run. Sounds impossible? Like that can’t happen? Well, it is happening. And it’s happening right now. So, if you’ve ever used a bank account, paid an overdraft fee, taken out a high interest loan, had a payday loan, we’re thinking of getting a title loan, this episode is for you. Before we dive in, hey, a little bit of housekeeping. Make sure you follow the podcast so you don’t miss future episodes. And if this is already hitting home for you, boop that like button. Give us a little love. It helps more people find the message. All right. Damon, you ready to crack this wide open? Sure. Hit it with a hammer.
[1:39] So last week, the CFPB that was previously responsible for helping to protect consumers from abusive practices by lenders just put out a curt little notice and said, effective immediately. Boop. You know, no more penalties for unauthorized payment withdrawals, no requirement to warn you before taking money from your account. Why do you think this happened? Well, I don’t know the ins and outs of why it happened, but I’m sure it has to do with there’s people with a lot of money that lobbied for this to happen. So it happened. I mean, it’s usually about as simple as that. So where does that leave people That are Have been facing these issues in the past And there was a need to have A regulation to prevent these abuses Well.
[2:31] You know, I don’t like the fact that this stuff is going away, but I always go back to the fact, even when this stuff was in place, that people cannot and should not rely on some outside government entity or whatever to protect them. And I know there’s a need for that, obviously, but this just is now emphasizing even more that you need to look out for you. If there’s some safety net there in place, that’s good, but you still need to be looking out for yourself. And there’s things that you can do to make sure you don’t fall victim to this stuff, whether the CFPB is going to help regulate it or not.
[3:15] Well, I agree with you. And one of the issues that I have is that those people
[3:20] who are most affected by this rule are those that are already living on the financial margin. Yes. Already are turning to payday loans because they can’t make it or title loans or whatever. And one little hiccup can push them over the edge. And actually, these things link together because if it pushes somebody over the edge to now get an overdraft fee that just went up, you know, from five bucks to 35 bucks, that can really put people in a bad situation. So I agree that people should be responsible for all of their financial transactions and always make smart decisions, always make the right choices. But if we protected people from abuse previously and just erased it with one short paragraph, I mean, what role does the government have to protect consumers?
[4:16] Well, that’s getting a little too deep for me. I don’t know. I agree it sucks. But from a practical standpoint, consumers still have to take the bull by the horns. And number one, don’t have a checking account with overdraft fees or overdraft protection. Oh, we haven’t even gotten to that. Because right now we’re still on the, if you have a payday loan, a title loan, or high interest rate installment contract, there’s no more notification to let you know when the payment’s going to be taken out. Well, my number two, I should have flipped it, but that was going to be my number two, was payday loans, title loans, do not get those ever, CFPB or no CFPB. And then you might say, well, I had to, I had rent due, I had this, I had no.
[5:02] Usually when you’re getting those type of loans is because you’re over leveraged everywhere else and you’ve exhausted your ability to get a regular loan. So that means you have all this other debt. Rather than getting into more debt and even worse debt, there’s probably some things that we can look at to fix the situation once you get to the point where my only option is a payday loan that’s where you need us to stop i don’t care if there’s a cfpv there or not do not get i don’t care if you have to you know go behind you know stop making payments on your credit cards or your you know lending club loan or whatever do not just kick the can down the road and say well now i just need to get this this payday loan because that’ll get me through till Friday and then I’ll be able to turn on a pay. No, you won’t. You won’t be able to unless you got some rich uncle or some big bonus coming in at work. You’re not going to be able to turn around and pay that off. It’s just going to get you deeper into debt. All right. So let’s go over this scenario where somebody just got a surprise layoff and now they can’t make the rent payment. And previously they might’ve turned to a lender of last resort. Okay. Like, like a payday lender, title lender, even taking a cash advance from a credit card. So what do they do now? Well, obviously every situation is different, but if you just got laid off, you’re probably going to have a hard time getting a payday loan anyway. Well, if you can fog a mirror.
[6:24] Well, so it depends on the situation. So if you literally are, I just don’t have the cash. Even if you say, okay, even if I stop paying all of my other debts, I don’t have a paycheck. Well, at that point, if you’re like, I just need cash and you can get that loan, just assume that the end goal there is going to probably be bankruptcy at that point. And then if you need the cash, you need the cash, right? You just got to kind of think outside the box a little bit, but don’t go into it thinking, okay, I’m going to get this and I’m going to get a job next week. And that’s going to allow me to pay it off. Just assume if you’re at the point where you need to get payday loans and then get more payday loans to pay off the previous payday loans, you’re probably going bankrupt. That’s where we’re going. So what do you say to the person that is, like I said before, just getting by, just limping by and feels like they’re doing their best, but these things are going to just push them over the edge. How do you get them to just swallow that advice and say, suck it up, buttercup?
[7:26] Well, again, everybody’s different. They have different motivational factors.
[7:30] So there’s no one size fits all. But when you get to that point, that’s where you have to realize there’s a problem. And we might need to step back. Well, we definitely need to step back and look at the overall situation and say, okay, what is going on here, especially with the cash flow, with the debt? What do we expect to happen in the future? Why do you feel you need this payday loan? Okay, you need it for this, this, and this. Okay, is there another way we can get to this, this, and this without getting that payday loan,
[7:58] without getting that title loan at 35%, 40%, 50% interest? All right. So let’s give them some actionable advice. What should they do when they run into that? You keep saying get advice, but how do they do that? Well, you can go to my website and call me. I mean, that’s a little self-serving advice, obviously. Well, what’s your website? DaymondDay.com. it looks like damonday.com but it’s damonday.com alright d-a-m-o-n-d-a-y dot com and when somebody goes to the website what happens next, They usually get up, go make a sandwich, think about it some more.
[8:37] This is just, you know, you can reach out for help if you want. You know, request a quick consultation. I can look at your situation. We can talk about some potential options. You know, if you’re feeling stuck, you’re not sure what to do, you’re thinking about getting a payday loan or, you know, pulling money out of your house or pulling money out of your 401k and you’ve got some debt and whatever it is, you want to be able to walk through the different, you know, strategies before you pull the trigger on anything, because if I know anything, I know people have a great ability to make a bad situation worse. Well, especially when it comes to finances, because people don’t know what they don’t know. And so they make, you know, understandable emotional reactions like, oh my God, I don’t want to fall behind. But the reality is who cares? Yeah. Or, oh, it’s going to hurt my credit. Who cares? And it’s like, if you’re at a point where your only recourse seems to be a payday loan, your credit already sucks. I can tell you that right now. Right.
[9:40] So, all right. The other thing that happened. But real quick, but we got to put this, you know, circle back to putting this in context of, well, you know, there’s reasons not to get the payday loans, but circling back to the CFPB. And yeah, they’re pulling back on these things where they’re not going to be able to, now they’re not requiring banks to give you notice or when they pull money. Here’s another blanket piece of advice. If you’re going to have these types of loans or really any types of loans, as a general rule, and this is good advice for anybody, I don’t like anybody to have access to my checking account. Right.
[10:18] So, I mean, that’ll cut off a lot of these things that the CFPB is supposed to be protecting consumers from. If these entities don’t have access to your checking account in the first place, you don’t need the CFPB to protect you because they can’t double charge you. And so you can say, well, I have to get this loan. I have to do this. I have to give them access to my checking account. No, you don’t. Go set up a different checking account and give, and I call it a dummy checking account if you want. And then give them, if you have to get something, then give those people access to your other checking account that is not your main checking account. Your direct deposits from work don’t go into that account. It’s just a separate account. And then you can control at any given time how much money you want to put in there or not, right? You control it. Now you’re not beholden to these entities that are charging you on this day and this day and this day. And oh my gosh, I’m not gonna be able to pay my rent because they’re just automatically taking this money out. No, you can control that and say, you know what? I can’t afford that bill this month. I need to pay my rent. I’m not going to put enough money. Make sure that account does not have overdraft protection. And then when they try to charge you, it won’t go through. It’ll bounce. And guess what? They’ll call you and they’ll email you and they’ll send you letters. They’ll say, hey, you forgot to pay us. It didn’t work. They might charge you a return fee. And you might decide not to pay it.
[11:45] Well, this is another good reason why you and I have both said, don’t use a debit card. Yeah. Because it just goes straight into your checking account. It opens you up to all sorts of things. Nobody should have access to your main checking account where you get your paychecks and you pay your rent and your mortgage. Don’t give anybody access to that. In fact, you can set up as many bank accounts as you want. You don’t have to go into the bank anymore. You do it all online. I have a nice little cottage industry where I go around collecting checking account bonuses. I usually make about $2,000, $2,500 a year. Yeah, just opening new accounts. Just opening new accounts. And I do the direct deposit. And obviously, it’s harder if you have a job. The banks are getting smarter and smarter on their requirements. It usually just be, you know, 10 debit card transactions and then you get the money. But still, open up a new account. Open up one that gives you like a $300 bonus for opening up a new account. And then you use that account to give people access to if you absolutely must. But then nobody has access to your main account. You don’t have overdraft protection on it. So you don’t have to worry about those fees. And you can close that account anytime you want.
[12:59] You know, I was having a conversation yesterday with a friend and he was saying, I can’t think of anybody I’ve known who goes and balances their checking account statement every month to make sure that it’s accurate. Nobody’s taking money out that they shouldn’t. And he’s right. We’ve kind of gotten away from that. This is all in the same sort of boat about having to take personal responsibility for your financial transactions instead of just putting them all on autopilot and not paying attention. Absolutely. Nobody balances their checkbook anymore. I mean, nobody under 50. Right.
[13:38] Well, let’s talk about the overdraft fee. Now, I thought what was really interesting about this. Oh, and I’ll put the links to these two stories in the podcast description. I wrote about them both on, I think it was Friday. But what was really interesting about this was that Congress said we need to remove the cap on bank overdraft fees from $5 and return it back to $35 or more because we need to give people options.
[14:12] The only option I can think is, I know your bank has been pushing overdraft protection, but you need to go into your bank today and you need to say no. Let those things bounce. Yeah, cancel it. Because I think, I don’t, it’s been a while, but I feel like this all kind of came about with the idea that you don’t want to be embarrassed at a store. You know, this is what, when did overdraft kind of become a thing? Like 25 years ago? Yeah. I don’t remember. You know, it became a thing about the same time the debit cards did because banks realized they’re both moneymakers for them. Yeah. Yeah. And I think the whole thing kind of came from, you know, if you don’t want to be embarrassed by, you know, a card getting declined, you know, at the grocery store and that’s the only mode of payment you have. And now you’re in line with it. So I kind of understand that and banks came out with this. Oh, well, we can process that for you. No problem. Now we’re going to charge you 35 bucks or whatever it is. But then people like, oh, I don’t want to be embarrassed or whatever, right? So I think that’s where it came from. But then it got to the point where the banks just realized this is a huge moneymaker.
[15:20] And sometimes what they’ll do is, you know, you have a check that doesn’t go through on time because of an error or whatever. And you have, you know, a Netflix charge hit your account and a PBS chart. You could have a $3 charge hit your account and it overdrafted because your paycheck didn’t get deposited on time. And there might be three transactions, three little transactions that day that are being auto-drafted that go through an hour before. And now the bank hits you with a hundred, you know, three $35 charges.
[15:47] And now you’re spending over a hundred dollars for Netflix and PBS and whatever. And so my thing is no, no overdraft. If it gets declined, it gets declined, right? You can have a separate account if you want that you have your little emergency fund and you have a couple hundred bucks in that other account or on another credit card that you carry around with you so you can save yourself any potential embarrassment or something. If something gets, oh, no problem. I got my emergency card here. I’ll pay with this one. And I’ll have to,
[16:17] you can play it off, right? Well, that’s weird. I know there’s plenty of money. I’ll have to call my bank. Well, let’s just use this one for now. And then you leave the store and then you go, I’m glad that didn’t go through. That would have cost me a huge amount of money. And then you wait till tomorrow and your money’s back in your account. But cancel overdraft protection, set up multiple accounts. All these things that we’re talking about with the CFPB are things that you can take a couple of steps and protect yourself from directly. You know, the way banks used to do it is at the end of the day when they would process your transactions, they would always process the highest dollar amount first. Yeah. Try to get you. Yeah. So that more transactions bounced and they could hit you with the fees. Yeah. And now what some banks will do is like, oh, you can get a courtesy waiver. Oh, but we’re going to give you just one courtesy waiver a year. Yeah. Yeah.
[17:15] So it’s just don’t let them do the it’s just a payday loan really is all it is it’s a super high interest micro loan for 24 hours you know in most cases yeah and you’re paying up the notes for especially if what they overdrafted you on was a stupid five dollar charge you know because you bought a snickers and it just went through no problem and then later you figure oh crap that overdrafted me by two bucks. Here’s my $35 fee for that Snickers bar. Yeah. I had a client many years ago, 25 years ago, who had an overdraft fee that triggered his account to overdraft. That generated an overdraft fee.
[17:59] I remember calling his bank and going, come on. That’s that endless loop of hell right there. Right. They did fix it. It turned out to be an error, but it was terrible. But again, how much time and effort did that take and headache and hassle for him versus if he just didn’t have that service on his account because you can turn it off or close your bank account and go get a new bank account that doesn’t require you to have the overdraft, it would have saved him all that headache and hassle. You know, one of the benefits of age is, as you get older, you just care less about what other people think. Yeah. Like, if I was standing in line at a grocery store right now and my card was declined, I’d be like, eh, screw it. Well, do you want to put all this stuff back or do you want me just to take it? Yeah, I’ll put it back for you. No problem.
[18:57] You know, I’ve been in line before with the person that gets so embarrassed that they walk out of the store and leave it all and stuff. Dude, I just had that happen to me. about a month ago with instacart i went and did an instacart shop you know and when you pay for those of you that don’t do instacart you pay for the groceries with the instacart card like it has nothing to do with me it’s that their card right it’s all linked together i was at sprouts and i did this whole shop it was like 20 items luckily it was late at night they were getting ready to close actually stayed over trying to fix this for me so luckily there was nobody in line behind me, but the car just kept getting declined saying that the order was not found i was on the phone with support. Anyway, I was there for like a half an hour. They were trying all kinds of different things, could never get it to work and go through. And the end result was they just had to put all the stuff back and they’d already closed the store. And I’m like, I’m really sorry. So they got screwed and I got screwed and the customer got, everybody got screwed because the Instacart card wouldn’t work. And I just spent like 45 minutes and made nothing. And just out of principle alone, I called Instacart after. And I was like, I was supposed to get like $40 for that. I’ve spent over 45 minutes and through no fault of my own, I could, sorry, you know, that’s the way the cookie crumbles. What are you going to do about it? Quit? Right.
[20:17] Well, you know, we should probably start a new movement. We’ll call it libertarian finance. Basically, you’re just on your own. Yeah. But I mean, it’s, even when the stuff was in place though, you still can’t get complacent.
[20:29] Nobody’s going to look after your money. Nobody’s going to be a better steward of your money than you. So even though it sucks, and I agree with Steve that there’s no good reason from a consumer standpoint that these things are going away, there are those steps that you can take right now to make sure you don’t fall into that trap. Just don’t. And I know it sounds like, oh, you just don’t get the payday loan, but I need it. Maybe you do, probably you don’t. There just might be another way of looking at it. You don’t need that payday loan. Well, in all of my years of dealing with people that had payday loans, title loans, or high interest rate installment loans, I mean, actually very few of them, I’m doing air quotes, needed it. They fell into it because it was easy or it was made easy. But it’s that awareness when you’re in a jam and you’re feeling that panic and fear that all of a sudden you can get some sort of clarity and logic and say, I need to contact Damon.
[21:28] Well, you know, and one thing too, and it’s funny, it’s the whole reason we started the Penny Stupid channel where we, you know, we try these different side hustles out. Like, you know, that’s why I was doing the door or Instacart, DoorDash, Walmart, Spark, all that. I go drive once in a while to do that stuff to show people how you can make money. In fact, I’m, I went out driving last night with my 18 year old son. Who’s getting his, he’s got his learner’s permit. We’re working on getting his license. Right. So he has to get practice. He wanted to go out. Yeah. He has to get practice in the car.
[21:56] So what do we do? We, and, and so we have a deal. He goes out and we’ll do DoorDash and Instacart and he’s driving. He’s getting his practice and whatever we make, he gets half of it. So he’s like super excited. Hey, dad, you want to go? We went out last night, Sunday night. I was at softball games all day. I got home we were eating dinner like six o’clock I’ve been I’ve been at the softball field from since six in the morning I was freaking exhausted a little bit of sunburn on my face we did six games over the weekend and my son’s like hey dad you want to go out make some money and drive what am I gonna say no you’ve been stuck at home watching the dogs all day while I’ve been out with your sister yeah buddy we’ll go drive so we went on drove and we made uh just under a hundred bucks in a couple hours yeah he’s driving around getting experience he’s and he’s not only getting driving experience, but he’s getting work experience, learning how to do DoorDash, learn how to do Instacart. We talk about on the Penny Stupid channel about DoorDash Millionaire, and we got his Acorns retirement account set up. So 60% of everything he makes goes into his investment and his retirement account, and he keeps 40%. And it’s a great deal, but talk about these payday loans.
[23:03] You don’t, if you need a couple hundred bucks, get signed up on DoorDash, get signed up on instacart get signed up walmart spark uber eats lyft whatever you need to do get signed up on some of those things so if you get in a pinch and you need a few hundred bucks i could literally turn on my phone and if i needed three hundred dollars by friday no problem i could go make three hundred dollars by friday in the evenings and have that money instantly into my account as soon as i put the you know put the burrito on the guy’s porch i can get paid yeah.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
[23:36] You don’t need a payday loan. Supersize that paycheck. Yeah. Yeah. Go get these apps downloaded. You can make money whenever you need it. It’s like so easy. You know, what’s funny is it is easy once you know how to do it. And I am still amazed that even though we have pitched it in the past about people can contact you for, you know, consulting help or advice just to get going. Nobody does it. People make every excuse in the world why not to make extra money well you know that’s the reason why i started doing it because i used to tell clients all the time hey have you tried uber you tried lyft tried this get some extra money coming every month and you pay these credit cards off we could do that and i would always get excuses but honestly though i didn’t know anything about it i didn’t know like what it entailed or anything so it’s like gosh dang it i should just go do it i’m entrepreneurial and i really freaking enjoy it it’s weird i like doing it and and i actually like enjoy i enjoy spending time with my son we’re we’re out bonding doing things like because in my consulting business i don’t have a take your kid to work kind of a business like you know like like when i was growing up my dad he’s got a very successful steel business and you know he has a shop and you know when i was coming up i would able in junior high and sixth grade, I go and I could clean steel and I could sweep the floors and I was vacuuming the office. And then I worked my way up to a project manager by the time I was in college.
[25:05] And that was a business that my dad had that allowed me to do that at a very, very young age, get work experience. It was very valuable for me. And I got to earn money. And I was, I don’t have something like that. Like, Hey, come to work with me or do this. But with this DoorDash and Instacart and all this stuff, it’s great for like a, you know, a 16 year old, 18 year old, if they’re 16, they’re too young to do it themselves, but you can take them with you and you can start teaching them, you know, how you can go out and make money. It’s a new way of making money that didn’t exist when I was a kid.
[25:37] Well, let’s wrap this up. The two big things are there were two big surprise announcements that can cost people a lot of money and pain and fines and fees and everything else. And they just came out. And the first one is payday loans. People are going to actually probably overdraft accounts and get hit with more fees and they’re not going to be notified anymore. And with the overdraft, the fee is going to go from $5 to $35 or more. And the advice that I think we both clearly wound up on was nobody’s going to look out for you but you and I wish there was a magic wand I could wave to make people not as emotional when they run into these hurdles and they feel like a personal failure but there’s advice out there you can visit my website getoutofdebt.org 25,000 posts on there you can if you want to talk to a real person, as I wrote the other day, he might not give you a hug, but he’s going to give you great advice.
[26:45] You go to Damon Day, D-A-M-O-N-D-A-Y.com, and Damon is an exceptional deck coach. He’s the person I would send my mom to if she needed help, but she’s dead.
[26:58] Well, I’m not taking you to a comedy show. Yeah.
[27:06] But, you know, as far as the CFPB crap, simple stuff. Stop the overdraft protection on your checking accounts. Just get rid of it. And then open up a separate checking account that you, if you have to have something that somebody needs monthly access to draft your account. Put it on the other account that nothing would hurt you if there was a mistake made or they took too much money or whatever. And then don’t go get, don’t go get payday loans, don’t go get those bad loans. There’s other ways you can either increase your income or stop paying some of these other debts, resolve some of these other debts before you feel like the cashflow is so bad that you have to have a payday loan. All right, Damon, great advice. Let’s end on that. Until next time, I will see you. And before you say peace, I want to let people know that the podcast tomorrow is, you’re doing it all about you, and I’m looking forward to what you got to say. So, see ya. Peace.
[28:05] Got a money question keeping you up at night? Well, don’t just Google it. Get real answers from real people who actually know what they’re talking about. Head to getoutofdebt.org slash podcast to ask your question. You might hear it on an upcoming episode. But hey, if you’d rather keep it private, Damon Day has your back. Visit d-a-m-o-n-d-a-y dot com because getting out of debt is easier with the right help. That’s getoutofdebt.org slash podcast, where smart money questions lead to smarter money moves.
