Biden cracks down on 'junk fees' in new economic focus ahead of midterms
By Betsy Klein, Maegan Vazquez and Arlette Saenz, CNNUpdated: Wed, 26 Oct 2022 16:47:38 GMTSource: CNNPresident Joe Biden on Wednesday said his administration is cracking down on so-called junk fees,
By Betsy Klein, Maegan Vazquez and Arlette Saenz, CNNUpdated: Wed, 26 Oct 2022 16:47:38 GMT
Source: CNN
President Joe Biden on Wednesday said his administration is cracking down on so-called junk fees, including announcing new steps that effectively ban banks from issuing surprise overdraft fees and depositor fees on bounced checks.
His speech announcing the new actions also highlighted his administration's efforts to provide more "breathing room" relief to American consumers as the economy and inflation remain top concerns to voters 13 days before the midterm elections.
"Today, my administration is announcing new actions to lower the costs of everyday living for American families, to put more money in the pockets of the middle-income and working-class Americans, to hold big corporations accountable," Biden said at the White House, pointing to the "unfair hidden fees" like overdraft fees, hidden hotel booking fees and termination charges when consumers switch cable and internet plans.
Biden on Wednesday said that the new moves on junk fees will "immediately start saving Americans collectively billions of dollars in unfair fees," and that he has directed his administration to "reduce or eliminate" other junk fees.
Specifically, the Consumer Financial Protection Bureau is issuing new guidance publicly relaying that depositor fee and surprise overdraft fee practices "are likely unfair and unlawful under existing law."
"There's a lot going on that we're doing, and it adds up," Biden said of his broad efforts to help American consumers, noting that he understands "the frustration of the American people" amid rising prices.
The economy and inflation are issues at the front of voters' minds in battleground states, CNN polls released this week show. And along with acknowledging Americans' frustrations about the state of the economy, Biden has frequently deployed a midterm campaign message aimed at differentiating what he says are the savings in Democrats' policy plans from Republicans' costly proposals.
At the podium, Biden was keenly aware of the concerns, seeking to provide examples of how his, and his party's, efforts are affecting the economy and lowering costs -- highlighting downward trends in gas prices, reductions in the cost of hearing aids and new jobs at a New York Micron facility he's visiting this week.
The White House defines junk fees as those "designed either to confuse or deceive consumers or to take advantage of lock-in or other forms of situational market power," National Economic Council officials Brian Deese, Neale Mahoney, and Tim Wu wrote, falling into four categories: mandatory fees that often hide the full price, surprise fees that consumers learn after purchase, exploitative or predatory fees, and fraudulent fees. Tackling hidden fees was a key component of the President's meeting with the White House Competition Council last month.
The economic officials also highlighted other past actions -- including new rules and guidance on bank and credit card fees, taking aim at bad junk fee practices across industries through a new rulemaking process, restricting junk fees charged by auto dealers, requiring airlines to disclose fees up front, requiring internet companies to display a "Broadband Nutrition Label" and reducing the cost of shipping goods.
The President detailed some of those unfair changes with specific examples, including an overdraft fee when "the bank screwed up," a fee for a bounced check for someone trying to sell a bicycle online, resort fees added to bills at checkout, and processing fees for concerts.
"These junk fees -- they're unfair and they're hitting marginalized Americans the hardest, especially low-income folks and people of color. They benefit big corporations, not consumers, not working families. And that changes now," Biden said, vowing to announce more "concrete actions" going forward.
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