Washington – White House announced Wednesday a new initiative in partnership with two of the nation’s leading consumer protection agencies to curb tens of billions worth of fines, or “junk” fees, associated with goods and services.
President Joe Biden said Wednesday, “Studies show that hidden junk fees cause people to unknowingly pay more than they would have paid if they had been able to see the full price upfront and compare it to other options. They could end up paying up to 20% more.” He spoke from the White House Rose Garden.
“That’s wrong. That’s wrong,” Biden said. “It’s just taking advantage of people, and it’s making it harder for honest companies that are trying to do the right thing to compete.”
Biden, along with Federal Trade Commission Chairman Lina Khan and Consumer Financial Protection Bureau Chief Rohit Chopra, unveiled new policy proposals from the agencies aimed at banning junk fees in certain areas.
The FTC’s proposed rule would prohibit companies from embedding fees within transactions and force them to provide upfront the amount and purpose of the surcharges, which the release said would result in 10 billion You could potentially save more than a dollar. Under this regulation, the Commission will be able to secure refunds for consumers if they breach their obligations.
Khan told reporters on Tuesday that the rule “will not only put money back in people’s pockets, it will restore some measure of justice to American families and restore fairness to the marketplace.” .
The CFPB is targeting big banks by emphasizing consumers’ right to access complete, accurate and free account information upon request under a 2010 federal law.
“When people request basic information about their accounts, big banks charge them huge fees or lock them in endless customer service loops,” Chopra told reporters on Tuesday. I can’t do that,” he said. “It makes sense to charge competitive prices for legitimate services, but it doesn’t make sense to charge junk fees for basic customer care.
The CFPB gave a slap in the face. wells fargo, american bank and regional bank Imposing fines for unrelated overdraft fees or overcharges in recent years. Additionally, to combat the monopoly of big banks, the agency is expected to unveil a proposal later this month that would require financial companies to easily transfer customers’ banking data to competitors.
This was announced by the American Bankers Association. We are considering it carefully The CFPB’s recommendation is “to determine whether appropriate administrative procedures and relevant laws and regulations are followed.”
These proposals are part of the Biden administration’s comprehensive effort to increase competition among industries starting in 2022. presidential order On promoting competition in the economy. The Federal Information and Regulatory Agency, in collaboration with the NEC and the Council of Economic Advisers, also released new guidance on Wednesday to assist federal agencies in establishing new standards.
Both the FTC and CFPB have taken preliminary steps in the past few months to crack down on junk fees. Earlier this year, the CFPB released proposed rules regarding excessive credit card fees, while the FTC began targeting unfair practices in ticketing and other fees starting in late 2022.
Lawmakers have voiced their support for the agency’s new initiative. Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce, Science, and Transportation Committee, said the FTC would “propose rules that would require companies to disclose their fees from the beginning and ensure that the price they say is correct.” He commended the government for proposing to guarantee that you pay. “
Sen. Sherrod Brown (D-Ohio), chairman of the Senate Banking Committee, said junk fees are “an easy way for big banks and corporations to hide their true prices and charge Americans higher fees.” It’s just one means.”
“By cracking down on junk fees, the CFPB is keeping money in Americans’ bank accounts,” Brown added. “If we covered these fees industry-wide, Americans would be able to see all the ways companies are jacking up their rates and keep more money in their hands. .”
Co-sponsor Sen. Amy Klobuchar, D-Minnesota; Lodging Rate Transparency Act “We must put an end to these unexpected costs so that consumers have the transparency they need and deserve,” the bill was introduced in July.
“This announcement from the government is an important step towards ensuring the price you see is the price you pay,” she added.
The FTC will consider the final rule after a 60-day comment period, a senior administration official said.
