Biden Wants These Fees Gone
(LibertySociety.com) – On October 26, President Joe Biden said his administration will eliminate the “junk fees” Americans regularly pay as a way of helping families survive the current economic state in the US. Although inflation is a worldwide issue and the United States is getting off relatively easy, inflation is still high, and prices are continuing to rise for many items. The annualized rate is on its way down, but not fast enough for families to feel any real relief. The percentage still sits at a painful 8.2%. Many Americans are having a hard time making ends meet.
One month ago, the president met with the White House Competition Council when he asked companies to lower their profit margins to help Americans meet their budgets. Now, the Consumer Financial Protection Bureau (CFPB) is taking action.
CFPB Specifics
The administration defined junk fees as those that “confuse or deceive consumers,” like unnecessary service, surprise, overdraft, late payment, or termination fees. Biden believes these costs make it hard for Americans to shop around for better prices and serve no other purpose other than to gouge consumers. The announcement listed several studies proving how these types of charges hurt people in the US. After the president’s talk with the Competition Council, the entity started trying to find ways to “reduce or lower” such fees.
To that end, the CFPB sent guidance telling banks across the country that surprise overdraft fees and deposit fees charged when someone else’s check bounces are both against the law and must be eliminated. The bureau is also writing rules about banking and credit card fees. Two of the largest banks, Capital One and Citi, have already stopped charging overdraft charges. The administration encouraged over a dozen financial institutions to follow suit.
Other Departmental Moves
On October 20, the Federal Trade Commission (FTC) launched an initiative to address junk fee practices as well. The department is developing rules about businesses like ticket sellers and hotels, adding charges that add “little or no…value” to the service. The agency is not only looking to eliminate the practice of tacking on things like processing fees, it aims to punish companies that don’t comply.
Car dealerships and airlines are also on the chopping block, as the FTC and Department of Transportation (DOT) intend to crack down on those industries as well. Auto sellers would no longer be able to engage in bait-and-switch practices or add surprise fees and unnecessary add-ons, while airlines would need to disclose the true price of tickets up-front — including fees for baggage, cancellations, or seat location.
The Federal Communications Commission (FCC) intends to require internet companies to fully display every cost for consumers. Congress already helped Biden to address ocean shipping fees through the bipartisan Ocean Shipping Reform Act, which passed in June.
What do you think of the initiative? Do you believe it will help everyday Americans?
Copyright 2022, LibertySociety.com
