U.S. President Joe Biden delivers remarks on the U.S. economy from an auditorium on the White House campus in Washington, U.S., October 26, 2022.
Jonathan Ernest | Reuters
The White House is working to assure voters of the president Joe Biden is doing all it can to lower the cost of living with just two weeks until Election Day as polls increasingly show the economy is a top concern for Americans.
Flanked by CFPB Director Rohit Chopra and FTC Chairwoman Lina Khan at the White House on Wednesday, Biden announced initiatives to respond “junk fee” banks, airlines, cable companies and other industries. Unwanted charges are surprise costs added to consumer bills.
The speech was billed as “remarks on new actions to give families more breathing space”.
“One of the things that I think frustrates the American people is that they know the world is kind of clueless,” Biden said Wednesday. “They know that Putin’s war has put enormous pressure on Europe, the rest of the world and the United States, from blocking grain shipments to oil. And they want to know: what are we doing? A lot goes on about what we do. It adds up.
Democrats are under pressure to show they are tackling inflation ahead of the November 8 midterm elections. In recent weeks, voters have increasingly ranked the economy and inflation as the number one concern in the polls, ahead of abortion and threats to democracy. Polls show voters tend to favor Republicans on economic issues.
A big talking point for Republicans is gas prices. Biden focused on the price drop at the pump, frequently pointing out how the average U.S. gas price has fallen from its peak of more than $5 a gallon in June.
“We are making serious progress in bringing prices closer to where they were before the pandemic,” Biden said. “I will work very hard to make sure that the oil companies pass on the drop in the price of a barrel of oil to the pump.”
The Biden administration’s latest move, slashing “junk fees,” took months to prepare under pressure from the regulatory agency or outright ordering companies to disclose or eliminate a myriad of fees, a- he declared. For example, the Consumer Financial Protection Bureau rolled out new guidelines Wednesday banning banks from charging surprise overdraft fees on debit transactions and fees on deposits that bounce back later.
“And we’re just getting started,” he said, adding that there are tens of billions of dollars in junk fees in industries he’s ordered his administration to reduce or eliminate. The Federal Trade Commission began work last week on cracking down on “unfair and misleading fees across all industries — fees that were never disclosed … and there was no way to avoid the fees,” Biden said.
He cited concert ticket processing fees, “resort fees” at hotels, “excessive” late fees on credit cards, airline reservation fees and cancellation fees to prevent consumers to switch cable or internet plans as some of the charges the administration is tackling.
These are “surprise charges that companies stuff into invoices because they can,” he said.
Airlines have added many fees over the past decade, such as preferential rates for seats that do not come with extra legroom. Major carriers have also introduced basic economy tickets, no-frills fares that are less flexible than standard economy fares. The The Biden administration’s proposal is already being pushed back by carriers.
Earlier this month, Delta Air Lines said customers already have access to fees and prices and that it plans to file a formal comment on the proposal.
“They expect a carrier to provide at the time of research any potential charges or prices, regardless of who is actually researching,” said Peter Carter, Delta’s chief legal officer on the Oct. 13 call. . “So these may be charges that are not relevant to the consumer, which of course could create quite a bit of confusion for consumers.”
Chopra, who spoke at the press conference, said the bank overdraft and bad check fees were “probably unfair and illegal.” Biden said the move would “immediately begin to collectively save Americans billions of dollars in unfair fees” and hold corporations accountable.
“My administration is also clear that surprise overdraft fees are illegal,” Biden said.
– CNBC reporters Sarah O’Brien and Leslie Josephs contributed to this story.