U.S. President Joe Biden delivers remarks on the Hamas terrorist attacks in Israel in the State Dining Room of the White House October 10, 2023 in Washington, DC.
Drew Angerer | Getty Images
WASHINGTON — The White House on Wednesday will announce new initiatives to rein in tens of billions worth of surcharges tied to goods and services, or “junk” fees, in partnership with two of the nation’s leading consumer-protection agencies.
“Those sneaky fees might not matter a lot to the wealthiest Americans, but they sure do matter for hardworking Americans sitting around the kitchen table trying to stay on top of their bills and have a little left over,” Lael Brainard, director of the National Economic Council, told reporters on Tuesday.
President Joe Biden, along with Federal Trade Commission Chair Lina Khan and Consumer Financial Protection Bureau Director Rohit Chopra, will reveal new policy proposals from the two agencies aimed at banning junk fees in certain sectors.
The FTC’s rule proposal would prohibit businesses from burying fees within a transaction and force them to present the amount and purpose of surcharges, upfront — potentially saving consumers over $10 billion over the next decade, according to a release. Under the rule, the commission would be able to secure refunds for consumers if the mandate is violated.
The rule “would not just return money to people’s pockets but also restore a degree of justice to American families and restore fairness in our markets,” Khan told reporters on Tuesday.
The CFPB is targeting big banks by highlighting consumers’ rights to access complete, accurate and free account information upon request according to a 2010 federal law.
“When people request basic information about their accounts, big banks cannot charge them massive fees or trap them in endless customer service loops,” Chopra told reporters on Tuesday. “Charging a competitive price for a legitimate service makes sense but charging junk fees for basic customer responsiveness doesn’t.
The CFPB has slapped Wells Fargo, Bank of America and Regions Bank with fines, citing extraneous overdraft fees or overcharges in recent years. Further, to address big banks’ monopoly, the bureau will issue a proposal later this month to require financial companies to allow the easy transfer of customers’ banking transaction data to competitors.
The proposals are part of the administration’s overarching effort to increase competition across industries, beginning with Biden’s 2022 executive order on promoting competition in the economy. The federal Office of Information and Regulatory Affairs, in partnership with the NEC and the Council of Economic Advisers, will also publish new guidance on Wednesday to help federal agencies establish the new standard.
Both the FTC and the CFPB have taken preliminary actions toward cracking down on junk fees over the past few months. Earlier this year, the CFPB released a rule proposal on excessive credit card fees, while the FTC began targeting unfair practices in ticketing 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.