These are surprise costs added to consumer bills, and they’re some of the most frustrating for unsuspecting consumers. Charges range from bounced check and overdraft fees levied by banks, to hidden fees consumers are forced to pay for cable, internet, flights, hotel rooms, concert tickets, and more. President Joe Biden said the new initiatives will save consumers over $1 billion annually and provide “a little breathing room” for American families after months of steep inflation.
The changes were announced last week as part of a continued push by the Biden administration to highlight its efforts to lower the cost of living. “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,” Biden said.
With less than two weeks to go until the midterms, polls increasingly show the economy is a top concern for voters. A report published earlier this month by the Pew Research Center found that 79% of voters say it will be “very important” to their voting decisions, the highest share among the 18 issues included in the survey. The study also showed that voters prioritizing the economy over other issues tend to favor Republicans over Democrats.
Fewer overdraft fees
As part of Biden’s call to action, the Consumer Financial Protection Bureau (CFPB), America’s financial watchdog agency, issued guidance warning banks against charging an overdraft fee on a transaction when a customer’s account showed a sufficient balance at the time of purchase or withdrawal. This builds on work the CFPB began in 2021 to encourage banks to drop the use of overdraft and non-sufficient funds charges.
Prior to the pandemic, banks collectively charged their customers over $15 billion in overdraft and non-sufficient funds fees per year, according to a CFPB estimate. This year, the agency estimates that its work will result in Americans saving roughly $3 billion in fees. The CFPB is also developing guidance for credit card and other banking fees that currently cost consumers more than $24 billion per year.
“This is real money back in the pockets of American families,” said CFPB director Rohit Chopra. “It’s good for them, and it’s good for businesses that follow the law.”
Biden said his administration is also moving to tackle other “unfair and deceptive fees across all industries,” citing processing fees for concert tickets, “resort fees” at hotels, and airline rebooking fees as some examples. “We’re just getting started,” he said.