Chamber, banking groups blast new Biden ‘junk fee’ fight

The U.S. Chamber of Commerce and several banking groups slammed President Biden’s recent moves in the fight against “junk fees.”

Biden on Tuesday announced a new “strike force” to coordinate interagency efforts to crack down on price gouging. The announcement comes ahead of Thursday’s State of the Union address, where Mr. Biden is expected to tout his own efforts to lower prices for American consumers as his re-election campaign heats up.

The chamber criticized the strike force, co-chaired by the Justice Department and the Federal Trade Commission, as a return to government price controls.

“This effort by the Biden administration to use regulators to micromanage how private companies set prices will result in the same results: shortages, fewer consumer choices, a weaker economy, and fewer jobs.” said Neil Bradley, executive vice president for policy. Director and Strategic Advocacy Officer, U.S. Chamber of Commerce;

“Worse still, this strike force is directed by two government agencies that have been openly hostile to market efficiency and blatantly disregarding lower prices and better outcomes for consumers for the past three years. That’s going to happen,” Bradley said.

Mr. Bradley also announced that the Chamber of Commerce will file a lawsuit to block the Consumer Financial Protection Bureau’s (CFPB) rule finalized on Tuesday that would cap credit card late fees for large issuers at $8. He said it was planned.

Lindsey Johnson, president and CEO of the Consumer Bankers Association (CBA), said the CFPB “ignored important legal requirements in too haste to finalize the rule,” adding that the rule It was argued that all cardholders would bear the burden, although it would benefit delinquent customers. Credit card interest rates will rise and your credit score will decline.

Rob Nichols, president and CEO of the American Bankers Association, called the rule “flawed” and said the organization “put politics ahead of sound public policy” ahead of the State of the Union address. “They are clearly choosing to prioritize that.”

“The Department’s ill-advised decision to limit credit card late fees to a level far below the actual cost to banks will force card issuers to reduce credit limits, tighten standards for new accounts, and reduce the burden on all consumers. (including consumers who pay on time) will be forced to increase their annual interest rates,” Nichols said. He said.

But CFPB Director Rohit Chopra accused credit card companies of “exploiting loopholes to collect billions of dollars in junk fees from U.S. consumers.”

The CFPB estimates that capping the late fees that major credit card issuers can charge would save Americans $10 billion a year, an average savings of $220 per person.

“Today’s rules end the days when major credit card companies would hide behind inflationary excuses when they raised fees for borrowers and increased their own profits,” Chopra said.