President Joe Biden announced on Wednesday that the administration will crackdown on so-called “junk fees” in an apparent effort to lower down costs amid continued economic downturn.
Speaking at the White House, Biden said that the Consumer Financial Protection Bureau (CFPB) is taking new steps to ban banks from issuing hidden charges and added fees on cable bills, airline tickets, and hotel bookings.
We’re cracking down on hidden "junk" fees like surprise overdraft and deposit fees, credit card late fees, hidden hotel booking fees.
— President Biden (@POTUS) October 26, 2022
Even those termination charges that stop you from switching cable and internet plans to get a better deal.
They add up. We're taking action.
“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 middle income and working class Americans, to hold big corporations accountable,” he said, noting that these fees are “taking real money out of your pockets.”
The president said that he “appreciates the frustration of the American people” during this time of high inflation, adding that he is looking for ways for households to save more money.
“One of the things that I think frustrates the American people is they know the world is in a bit of disarray, they know that Putin’s war has imposed an awful lot of strains on Europe and the rest of the world and the United States, everything from him blocking grain shipments and oil,” he said. “And they want to know, what are we doing. And, there’s a lot going on that we’re doing and it adds up.”
Analysts said that the new guidance could have the CFPB leaning heavily on enforcement, instead of the lengthy bureaucratic process, when it comes to banking fees.
“This is a shot across the bow to any bank that continues to charge an overdraft fee,” said Ed Mills, Washington policy analyst at Raymond James. “This is regulation through enforcement.”
This comes a month after Biden called on the White House Competition Council to look into companies that are using complicated algorithms to hide fees and to reiterate that charging surprise overdraft fees is illegal.
“Each year, these junk fees cost Americans tens of billions of dollars, weighing down family budgets and making it hard for people to pay their bills,” Biden said.
The Labor Department’s latest Consumer Price Index report showed that prices have increased 0.4 percent since August.
