President Joe Biden announced new progress Wednesday on his administration’s “competition agenda,” specifically taking aim at junk fees while calling on Congress to pass legislation targeting hidden fees across multiple industries.
These costs can “drain hundreds of dollars a year from the pockets of hardworking American families, especially folks who are already struggling to make ends meet — but not anymore after today,” Biden said at the fourth meeting of the Presidential Competition Council on Wednesday.
The proposed legislation in partnership with the Consumer Financial Protection Bureau, called the Junk Fee Protection Act, would target four types of excessive fees:
- excessive online concert, sporting event and entertainment ticket fees
- airline fees for families sitting together on flights
- exorbitant early termination fees for TV, phone and internet services
- surprise resort and destination fees
In brief remarks before the meeting, Biden had called out credit card late fees in particular as “a junk fee if there ever was one,” saying the new guidance from the CFPB would reduce these fees.
“Today’s rule proposes to cut those fees from $31 on average to $8,” he added. “That change is expected to save tens of millions of dollars for Americans, roughly $9 billion a year in total savings.”
Biden called on Congress to pass the junk fee legislation, saying it would give “hardworking Americans just a little bit more breathing room.” It’s part of a plan, he added, to build “an economy that’s competitive and an economy that works for everyone.”
Rohit Chopra, director of the CFPB, noted before the announcement that “over a decade ago, Congress banned excessive credit card late fees.”
“But companies have exploited a regulatory loophole that has allowed them to escape scrutiny for charging an otherwise illegal junk fee,” he added in a statement to CNN. “Today’s proposed rule seeks to save families billions of dollars and ensure the credit card market is fair and competitive.”
Another fee category that frustrates many customers is event tickets sold online, for which additional fees are frequently high — and typically appear late in the checkout process when a customer is about to make the purchase.
For example, earlier this year, lawmakers grilled Live Nation president and CFO Joe Berchtold following a ticket sales debacle over exorbitant ticketing fees. Although the company said Wednesday it supports reform, it also said it opposes the proposed legislation.
“We stand ready to work with the President and Congress on many common sense ticketing reforms, while also speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.
Biden’s Transportation Department also took steps last fall during the previous meeting of the Competition Council to reduce “unnecessary hidden fees,” from airline and travel sites that the the President warned were “weighing down family budgets.”