Biden Admin. Announces Latest Crackdown on 'Junk Fees'

0:00

/1861

1×

Facts

• The Biden administration Tuesday announced a series of rule changes and regulations cracking down on so-called 'junk fees' associated with late credit card payments, hidden fees, and 'bulk billing' for services.¹
• One new regulation includes a new Consumer Financial Protection Bureau (CFPB) rule setting an $8 cap for most credit card late fees and requiring banks to show why they should charge more than $8. The average credit card late fee is currently $32.²
• The rule would save consumers more than $10B per year, and it applies to large credit card issuers with more than 1M accounts and hold more than 95% of total outstanding credit card debt. US credit card debt recently exceeded a record $1.1T.³
• The White House, which in a fact sheet detailed how Americans pay $90B in 'junk fees a year,' claims that eliminating fees associated with event tickets, internet, apartment rentals, and banking would save consumers $20B per year.⁴
• Also, the Federal Communications Commission (FCC) is proposing a rule that would ban “bulk billing” arrangements in which landlords and providers charge for a bundle of services, even if a customer hasn’t opted in.⁴
• In addition, the White House is forming a new “strike force” led by the Justice Department (DOJ) and Federal Trade Commission (FTC) to combat illegal and unfair pricing on groceries, prescription drugs, healthcare, housing, and financial services.⁵

Sources: ¹Forbes, ²ABC News, ³CNN, ⁴The White House and ⁵Associated Press.

Narratives

• Democratic narrative, as provided by NPR Online News. The Biden administration continues to be a hero to consumers, who are now due to save billions of dollars. The White House is prioritizing easing the financial burden vulnerable people face, and reducing or eliminating unnecessary 'junk fees' is a major part of this fight.
• Republican narrative, as provided by FOX News. This is classic government overreach by the Democratic administration. These regulations are going to cause the banking system problems, including reducing competition and disincentivizing people to pay their credit card bills on time. In an effort to bribe people for their votes, the White House is hurting both businesses and consumers.