Today, President Joe Biden joined the leaders of the FTC and CFPB to explain U.S. actions against junk fees. The president did not mince words nor did he spare companies in any sector of the economy for gouging consumers and families:
“Things like, as been mentioned, surprise banking overdraft fees, excessive credit card late fees, hidden hotel booking fees, or those huge termination charges to stop you from switching cable and Internet plans to a better deal. Surprise charges that companies sneak into bills because they can.”
The president also attacked other junk fees, including by airlines.
CFPB director Rohit Chopra also announced today new guidance to counter the worst “illegal” bank junk fees, including both unfair overdraft fees and penalty fees charged “to every person who deposits a check that bounces. The penalty is an unexpected shock to depositors who thought they were increasing their funds.” The CFPB also maintains a web page on all its “junk fees” actions.
Last week, the FTC announced a new junk fees rule-making. Chair Lina Khan issued a statement that started succinctly: “‘Junk fees”’ are extra charges associated with unnecessary or worthless services.” The FTC will soon announce a 60-day comment period “on the harms caused by junk fees and the unfair or deceptive tactics companies use to impose them.”
President Biden’s remarks today updated his September remarks to the White House Competition Council. As PIRG’s consumer campaign director Mike Litt said at that time:
“President Biden’s remarks echo the Consumer Financial Protection Bureau’s new initiative launched in January to save Americans billions of dollars in junk fees. The CFPB sought public input on junk fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan or payment transfers that are unexpected, unclear or too high.”
PIRG will continue all our own efforts to fight junk fees. We’ll also defend both the CFPB and FTC, and other agencies, from innumerable scurrilous attacks in the courts, on Capitol Hill and in the media by powerful special interests. But the CFPB and FTC have the biggest targets on their backs because they have a special place on the front lines to protect consumers. In fact, protecting consumers is the CFPB’s only job.
This is a big deal. As the President also said today: “There are tens of billions of dollars in other junk fees across the economy, and I’ve directed my administration to reduce or eliminate them.”
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.