Biden Moves to Combat ‘Junk Fees,’ Declares Surprise Overdraft Fees ‘Illegal’

President Joe Biden speaks to the press as he walks to Marine One prior to departure from the South Lawn of the White House in Washington, on Oct. 27, 2022. Saul Loeb/AFP via Getty Images

The Biden administration is taking steps to fight what the president calls “junk fees,” as American citizens struggle to make ends meet due to inflation.

The move against “junk fees” will lower the cost of everyday living for American families and put more money into the hands of working-class and middle-income citizens as well as hold big corporations accountable, President Joe Biden said in a remark on Oct. 26, according to the White House.

Biden’s reference to “junk fees” concerns payments like excess credit card late fees, surprise banking overdraft fees, huge termination charges for switching cable and Internet plans, and hidden hotel booking fees. Such costs are snuck into the bill by companies “because they can,” Biden said.

“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 their bills. So my administration is taking action to eliminate these fees.”

Biden claimed that there is an “entire industry” popping up in the country aimed at helping companies use complicated algorithms to “hide fees that hurt consumers.”

The president went on to declare surprise overdraft fees as “illegal.” In addition, the administration is developing rules and guidance to take on credit card late fees and other banking fees that cost Americans $24 billion a year.

There are “tens of billions of dollars in other junk fees,” which the administration will look into for reduction or elimination.

The Federal Trade Commission (FTC) is working on cracking down on “unfair and deceptive fees” across industries, charges that were never disclosed, like processing fees for concerts. The Department of Transportation is going after “unfair airline fees,” and intends to make airlines and travel sites disclose all fees upfront.

It remains to be seen how the president will go about implementing the removal of specific fee payments from private businesses, and whether companies will retaliate by adding excess amounts onto primary bills, which would carry negative consequences for the everyday consumer.

Rising Gas Price and Inflation, Struggling Americans

Biden claimed that his administration is “making progress” in bringing down costs borne by American families. Gasoline prices have fallen for the third week and are “going to come down more,” he promised.

Although gasoline prices are lower when compared to recent weeks, they still remain elevated and are a major contributor to inflation.

For the week ended Oct. 24, U.S. retail gas price was $3.887 per gallon. This is down from the peak of $5.107 per gallon hit in June, but it is over 57 percent higher than the $2.464 per gallon for the week ended Jan. 18, 2021.

And despite claiming that the president is “making progress” in bringing down costs, the reality is that American households are being crushed by rising prices.

According to a survey by the Nationwide Retirement Institute, 18 percent of Americans have skipped their meals or chosen to curtail buying groceries in the past 12 months due to high inflation. Further, 14 percent of Americans have been forced to avoid seeing a health specialist.

A survey by LendingClub found that 63 percent of Americans were living paycheck to paycheck, as of September, close to the historical high of 64 percent hit in March.