WASHINGTON — The Biden administration announced new measures intended to crack down on so-called junk fees charged by banks and other companies as part of a wider effort to try to lower costs for Americans with the highest inflation in decades.
The Consumer Financial Protection Bureau issued new guidance Wednesday making it illegal for banks to charge overdraft fees when at the time of purchase the bank website or ATM balance showed the customer had enough money in their account. The agency will also make it unlawful for banks to charge a fee to a customer who deposits a check that then bounces.
“Each year these junk fees that companies charge cost Americans tens of billions of dollars, weighing down family budgets and making it harder for people to pay the bills, so my administration has taken action to eliminate these,” President Joe Biden said in remarks from the White House on Wednesday.
In his remarks, the president also highlighted new rule requirements put into place last month on airlines and online travel websites to disclose fees for picking a seat, checking a bag and other add-ons.
Biden said his broader plan would tackle hidden hotel booking fees, termination charges put in place by cable and internet companies and other “surprise charges, the companies sneaking the bills because they can.”
As the midterm elections approach, Biden has been increasingly talking about efforts his administration has been taking to lower the cost of gas prices and health care as he makes his closing pitch to voters, who have listed concerns about the economy and inflation as their top priorities.
“I know it’s been a tough few years, but from day one, my administration has been laser-focused on easing the burden facing working-class families and giving them, as my dad would say again, just a little breathing room,” Biden said.
Eliminating the two banking fees will save consumers more than $1 billion a year, the White House said in a statement. The administration has been pushing banks to drop overdraft and other fees related to having insufficient funds and this year overdraft fees are expected to be down 20% compared to 2019, the White House said.