U.S. President Joe Biden delivers a speech on the Hamas terrorist attacks in Israel in the State Dining Room of the White House on October 10, 2023 in Washington, DC.
Drew Angerer | Getty Images
WASHINGTON – The White House, working with two of the nation’s top consumer protection agencies, will announce new initiatives Wednesday to curb tens of billions of dollars in goods and services surcharges, or “junk” fees.
“For the wealthiest Americans, these sneaky fees may not be that important, but for hard-working Americans sitting at the kitchen table trying to keep track of their bills and have something left over, they certainly matter,” Lael says Brainard, director of the National Economic Council, told reporters on Tuesday.
President Joe Biden will join Federal Trade Commission Chair Lina Khan and Consumer Financial Protection Bureau Director Rohit Chopra to unveil new policy proposals from the two agencies aimed at banning junk fees in certain sectors.
The FTC’s proposed rule would prohibit companies from burying fees in a transaction and force them to disclose upfront the amount and purpose of the surcharges – potentially saving consumers over $10 billion over the next decade, according to a press release -dollars would bring. Under this arrangement, the Commission would be able to ensure refunds to consumers if the mandate is breached.
The rule “would not only put money back in people’s pockets, but also restore a measure of justice for American families and fairness in our markets,” Khan told reporters on Tuesday.
The CFPB is targeting big banks by highlighting 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 can’t charge them high fees or trap them in endless customer service loops,” Chopra told reporters on Tuesday. “It makes sense to charge a competitive price for a reputable service, but it doesn’t make sense to charge junk fees for basic customer responses.”
The CFPB has fined Wells Fargo, Bank of America and Regions Bank, citing improper overdraft fees or excessive fees in recent years. To counter the monopoly of big banks, the bureau will unveil a proposal later this month that would require financial firms to allow their customers’ banking transaction data to be easily transferred to competitors.
The proposals are part of the administration’s overarching effort to increase competition across industries, starting with Biden’s 2022 executive order to promote competition in the economy. The Federal Office of Information and Regulatory Affairs, in collaboration with the NEC and the Council of Economic Advisers, will also release new guidance on Wednesday to assist federal agencies in setting the new standard.
Both the FTC and CFPB have taken initial action to reduce junk fees in recent months. Earlier this year, the CFPB released a proposed rule on excessive credit card fees, while the FTC began cracking down on unfair practices in ticket sales and other fees in late 2022.
The commission will consider a final rule after a 60-day comment period, according to a senior administration official.