Biden Proposes Banning Junk Fees

0:00

/1861

1×

Facts

• On Wednesday, US Pres. Joe Biden proposed a new Federal Trade Commission (FTC) rule that will prohibit private companies from hiding fees – widely known as “junk fees” – from consumers.¹
• The president said that even if wealthy people aren’t bothered by these fees, they “matter to working folks” and make it “harder for honest businesses who are trying to do the right thing.”²
• The proposal would affect several industries, including car rental agencies, hospitality, and businesses that provide tickets to events.³
• A 60-day public comment period will commence once the rule is published in the Federal Register. Although the administration didn't specify when it would go into effect, once the rule is being enforced, violators will be fined and required to pay back customers.⁴
• The new proposal comes in the same week the Consumer Financial Protection Bureau issued a guidance to stop large banks from charging their customers excessive fees.⁵

Sources: ¹USA Today, ²Associated Press, ³Reuters, ⁴Abc news and ⁵Washington Post.

Narratives

• Republican narrative, as provided by Daily Wire. The federal government should stay out of regulating any fees companies charge and should instead let the market dictate. If consumers are offended by charges, they can take their money elsewhere. And if enough people choose this option, the business will suffer. The next step after regulating fees would be the disastrous policy of fixing prices.
• Democratic narrative, as provided by The american prospect. Republicans might want to let the market dictate the application of hidden fees, but all that’s led to is corporate abuses and lost wages for average Americans. This is a winning proposal that will help ordinary folks fight back against the economic elites. Democrats should continue to do more of these simple actions that help a wide swath of people.