Jhe White House is cracking down on so-called “junk” fees from banks, airlines, cable companies and other entities.
These are surprise costs added to consumer bills, and they are among the most frustrating for unsuspecting consumers. Fees range from NSF checks and overdraft fees levied by banks to hidden fees consumers are forced to pay for cable, internet, flights, hotel rooms, concert tickets, and more. President Joe Biden said the new initiatives will save consumers more than $1 billion a year and provide “some respite” for American families after months of high inflation.
The changes were announced last week as part of an ongoing push by the Biden administration to highlight its efforts to lower the cost of living. “I know the past few years have been difficult, but from day one my administration has been focused on easing the burden facing working-class families,” Biden said.
With less than two weeks to go until the midterm elections, polls increasingly show that the economy is a top concern for voters. A report released earlier this month by the Pew Research Center found that 79% of voters say it will be “very important” to their voting decisions, the highest share among the 18 questions included in the survey. The study also showed that voters who prioritize the economy over other issues tend to favor Republicans over Democrats.
Fewer overdraft fees
As part of Biden’s call to action, the Consumer Financial Protection Bureau (CFPB), the US financial watchdog, issued guidelines warning banks not to charge overdraft fees on a transaction when a customer’s account had a sufficient balance at the time of purchase or withdrawal. This builds on the work the CFPB began in 2021 to encourage banks to move away from the use of overdraft and insufficient funds fees.
Before the pandemic, banks collectively charged their customers more than $15 billion in overdraft and insufficient funds fees per year, according to a CFPB estimate. This year, the agency estimates its work will save Americans about $3 billion in fees. The CFPB also develops guidelines on credit card fees and other bank charges that currently cost consumers more than $24 billion a year.
“This is real money in the pockets of American families,” CFPB Director Rohit Chopra said. “It’s good for them, and it’s good for law-abiding companies.”
Biden said his administration was also moving to tackle other “unfair and misleading fees across industries,” citing concert ticket processing fees, “resort fees” at hotels and resorts. airline booking fees as examples. “We’re just getting started,” he said.
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