Biden moves to limit credit fees to $8 for missed payments in latest "junk fee" crack down
WASHINGTON — The Biden administration moved Wednesday to cap most credit card late fees at $8 for a missed payment.
President Joe Biden also urged Congress to crack down on "excessive" junk fees, or the additional fees ticket brokers, airlines and resorts tack onto customers' bills, .
“These unfair fees add up," Biden said at a meeting with cabinet secretaries, the head of the Consumer Financial Protection Bureau and other advisers. "It’s a basic question of fairness.”
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Administration officials outlined four specific types of "junk fees":
Excessive online ticket fees: The White House highlighted the "massive" service fees added to the cost of online concert, sporting event and other entertainment tickets, which dramatically raise costs.
Airline fees for families with young children: Biden pushed Congress to ban family seating fees to prevent parents from paying higher prices to guarantee a seat with their children.
Early TV, phone and internet termination fees: The president is also targeting early termination fees consumers pay when they switch to a different provider.
Resort and destination fees: The administration wants Congress to ban charges added on to hotel visits and online reservations. Biden wants Congress to require hotels and resorts to include those fees in the advertised cost of the room.
Biden previously tasked federal agencies with finding ways to reduce or eliminate junk fees last fall.
Rohit Chopra, director of the Consumer Financial Protection Bureau, said his folks found a legal loophole credit card companies have been exploiting to charge billions of extra dollars that go beyond what a late payment costs banks and what it needed to deter late payments.
"Nobody is saying that you shouldn’t pay your fees on time. And no one says the bank should lend you money for free," Biden said. "But that’s what banks charge interest for."
Bipartisan legislation passed in 2009 allows the Consumer Financial Protection Bureau to curb excessive credit card and late fees, according to the White House.
The CFPB submitted the proposed change for review on Wednesday, but consumers are unlikely to be affected until at least 2024, according to Chopra.
Who pays fees?: Minorities spend more on banking fees than white people, survey says
Taylor Swift ticket fiasco fuels new calls for reforms
The Senate Judiciary Committee examined the lack of competition within the ticketing industry and grilled Ticketmaster executive Joe Berchtold during a hearing last month following the company’s mishandling of Taylor Swift’s concert tickets.
The company canceled its November general public ticket sale for Swift’s highly anticipated tour after several days of turbulence during its verified fan presale, angering hundreds of thousands of fans who never got tickets.
Berchtold, the president and CFO of Ticketmaster's parent company Live Nation Entertainment, defended his company, testifying that "industrial-scale ticket scalping" and an unprecedented number of bots were responsible for the large-scale problems.
Senators in both parties challenged Ticketmaster during the hearing, which also looked at ticketing fees.
Jack Groetzinger, SeatGeek CEO, told the committee that the only way to restore the ticketing industry was by breaking up the two companies. Ticketmaster and Live Nation merged in 2010 and have faced scrutiny since.
Previewing Biden's announcement on Tuesday, the White House said bipartisan support for reforms has administration officials optimistic about legislative action to reduce fees.
Biden said Wednesday administration officials will be meeting with state and local officials about what they can do to crack down on junk fees.
Contributing: Maureen Groppe
This article originally appeared on USA TODAY: Biden pushes for "junk fee" crackdown, $8 cap on credit card late fees