Biden Calls On Congress To Pass Junk Fee Prevention Act

President Joe Biden’s administration has announced actions to further advance his agenda of promoting competition in the American economy. The President has called on Congress to pass a Junk Fee Prevention Act that cracks down on four types of junk fees that cost American consumers billions of dollars a year. These include:

• Cracking down on excessive online concert, sporting event, and other entertainment ticket fees

• Banning airline fees for family members to sit with young children

• Eliminating exorbitant early termination fees for TV, phone, and internet service

• Banning surprise resort and destination fees

Also Read: How To Invest In Startups

The Consumer Financial Protection Bureau (CFPB) is proposing a rule that would slash excessive credit card late fees, pursuant to its authority under the bipartisan Credit CARD Act of 2009, the White House said in a statement on Wednesday.

Late Fees: The CFPB said major credit card issuers continue to profit off late fees that are protected by an expansive immunity provision. “Credit card companies have also relied on this provision to hike fees with inflation, even if they face no additional collection costs. The proposed rule would help ensure that over-the-top late fee amounts are illegal. Based on the CFPB’s estimates, the proposal could reduce late fees by as much as $9 billion per year,” it said.

President Biden pointed out in his tweet that unfair, hidden “junk fees” that include additional charges while buying airline or concert tickets add up. “My Administration is cracking down on these fees, getting hard-working Americans a little more breathing room,” he said.

Specifically, the proposed rule would lower the immunity provision for late fees to $8 for a missed payment as well as end the automatic annual inflation adjustment. The proposed rule would also ban late fee amounts above 25% of the consumer’s required payment. Companies currently charge people as much as $41 for each missed payment, CFPB pointed out.

Read Next: Fed’s Powell Says Only One Way To Resolve Debt Crisis — And Any Deviations ‘Would Be Highly Risky’