By: Stacy M. Brown/NNPA
In a bid to shield consumers from hidden and excessive charges, the Biden-Harris Administration, in collaboration with the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB), is set to implement a series of robust measures targeting junk fees across various industries while also prohibiting fees for essential bank services.
Junk fees, clandestine charges that businesses surreptitiously tack onto customer invoices, have long plagued American consumers, costing families billions annually and obstructing fair competition. In a news release, the White House cited President Biden’s previous call to arms for federal agencies, Congress, and private enterprises to combat these fees and ensure full-price transparency, culminating in these latest initiatives.
Administration officials said research indicates that fees levied after the point of purchase hinder consumers’ ability to comparison shop, resulting in payments that can exceed the base price by up to twenty percent. “Such fees also unfairly disadvantage honest businesses, impede innovation, and disproportionately impact small enterprises,” officials stated in the news release.
[SCROLL BREAK!!! Bayou Beat News can also be found in PRINT at a store near you. Click the link below to check out our E-Edition!]
The Federal Trade Commission proposed a groundbreaking rule that, if enacted, would outlaw the imposition of hidden and deceptive fees, obliging companies to divulge the complete cost upfront. The regulation would encompass various sectors, including event tickets, accommodations, rentals, and more. Non-compliance could incur substantial penalties and necessitate refunds to consumers.
Meanwhile, the Consumer Financial Protection Bureau announced it is taking a stand against major financial institutions, mandating that they furnish essential information to consumers without charge. The move would eliminate fees for vital services like checking account balances, loan payoff details, and application-related account information.
Later this month, the CFPB plans to introduce a rule facilitating the secure and reliable transmission of banking transaction data among financial institutions. That measure aims to simplify the process of switching banks and managing accounts across multiple providers, thus encouraging competition based on service quality and upfront pricing.
The CFPB also revealed that its crackdown on junk fees has already delivered substantial savings to consumers. Bounced check fees have plummeted by over 86 percent since 2021, equating to nearly $2 billion in savings, officials said in the release. Additionally, two-thirds of major banks have entirely abolished these charges. Coupled with prior reductions in banking junk fees, that action translates to an average annual savings of $170 for the 33 million households affected.
The CFPB also announces a triumph in securing an extra $140 million in consumer reimbursements from companies guilty of imposing illegal junk fees, such as surprise overdraft charges and multiple bounced check fees for a single transaction. The White House said these announcements follow the issuance of guidance to financial institutions last October regarding these illicit fees.
Simultaneously, the White House said it bolstered its comprehensive approach to competition, with the Office of Information and Regulatory Affairs unveiling new guidelines to fortify the integration of competition-centric elements into agency regulations. Developed in concert with key economic councils, officials said the directive will steer agencies in designing regulations that foster competition while upholding other vital policy objectives.
Further, the Department of Transportation said it had successfully negotiated commitments from major airlines to enhance service quality, guaranteeing amenities such as meals, hotels, and family seating. Additionally, the Department of Housing and Urban Development has urged industry stakeholders and housing providers to adopt measures that promote fee transparency for renters.
The Federal Communications Commission has also mandated the implementation of “Broadband Nutrition Labels,” providing consumers with clear and concise information about the costs and fees associated with internet services. Various agencies, including the FTC, CFPB, and FCC, have proposed rules to curtail fees from credit cards to auto sales.