Biden to address ‘junk fees’ from banks, airlines, cable companies

WHAT YOU NEED TO KNOW:

• President Joe Biden on Wednesday announced that the administration will address hidden junk fees as a way to help tamp down inflation that has hit four-decade highs.
• The Consumer Financial Protection Bureau is acting to eliminate banking fees, hidden charges and added fees on cable bills, airline tickets and hotel bookings.
• Biden said “‘junk fees’ benefit big corporations. Not consumers.”

President Joe Biden on Wednesday vowed to take on hidden fees consumers are forced to pay on cable bills, hotel bookings, airline and concert tickets, while U.S. financial regulators declared bank fees for bounced checks and overdrafts unfair.

“These are junk fees,” President Joe Biden told reporters at the Eisenhower Executive Office Building. “They benefit big corporations. Not consumers. Not working families. And that changes now.”

Biden cued that his administration would address airline and concert tickets, and hotel bookings shortly after the U.S. Consumer Financial Protection Bureau (CFPB) issued guidance that surprise overdraft fees and unexpected depositor fees for bounced checks are likely unlawful.

The initiative could eliminate billions in banking fees, the White House said.

According to the CFPB, consumers are often caught off guard by overdraft fees when their online accounts still show a positive balance. Some customers may find they owe a fee for depositing a check that they did not know was bad.

CFPB said that both fees likely violate the Consumer Financial Protection Act’s prohibition on unfair fees.

The White House, using a fact sheet, noted that overdraft and non-sufficient funds fees accounted for roughly $15.5 billion in revenue for banks in 2019.

Pressure by the regulator pushed revenue from such fees down 90% at Bank of America this summer, Reuters reported.

The president also said that the Federal Trade Commission last week started to work on a rule to crack down on “unfair and deceptive fees across all industries.”

Biden said the two items his administration is examining are processing fees for concert tickets and resort fees at hotels.

“We’re just getting started. There’s tens of billions of dollars and other junk fees across the economy that I’m directing my administration to reduce or eliminate,” Biden said.

Biden’s remarks come after the White House Competition Council held a meeting last month, in which he ordered federal agencies to take actions to lower or eliminate hidden fees, charges and add-on costs, which he said were weighing on Americans’ budgets.

Source: Reuters