FTC and CFPB cracking down on "junk" bank fees

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President Joe Biden, along with Federal Trade Commission Chair Lina Khan and Consumer Financial Protection Bureau Director Rohit Chopra, will reveal new policy proposals from the two agencies aimed at banning junk fees in certain sectors.

The FTC's rule proposal would prohibit businesses from burying fees within a transaction and force them to present the amount and purpose of surcharges, upfront — potentially saving consumers over $10 billion over the next decade, according to a release. Under the rule, the commission would be able to secure refunds for consumers if the mandate is violated.
The CFPB is targeting big banks by highlighting consumers' rights to access complete, accurate and free account information upon request according to a 2010 federal law.

"When people request basic information about their accounts, big banks cannot charge them massive fees or trap them in endless customer service loops," Chopra told reporters on Tuesday. "Charging a competitive price for a legitimate service makes sense but charging junk fees for basic customer responsiveness doesn't.

The CFPB has slapped Wells Fargo, Bank of America and Regions Bank with fines, citing extraneous overdraft fees or overcharges in recent years. Further, to address big banks' monopoly, the bureau will issue a proposal later this month to require financial companies to allow the easy transfer of customers' banking transaction data to competitors.
Both the FTC and the CFPB have taken preliminary actions toward cracking down on junk fees over the past few months. Earlier this year, the CFPB released a rule proposal on excessive credit card fees, while the FTC began targeting unfair practices in ticketing and other fees in late 2022.

The commission will consider a final rule after a 60-day comment period, according to a senior administration official.

Banks will look to replace any lost revenue from this by other means. The consumer will not get a free lunch.
Oct 31 (Reuters) - The Biden administration on Tuesday will seek to impose new rules on retirement plan providers to close loopholes that officials argue allow the industry to sell products that boost their revenue at the expense of customers, the latest effort by the administration to crack down on so-called junk fees.

The proposed Labor Department rules require retirement plan providers to only sell commodities and insurance products, such as annuities, to clients when doing so is in the customer's best interest.

Choices are sometimes less at credit unions. You get the choice of a checking account with fees, but it pays negligible interest or a free account with no interest. Their CD rates are much lower than typical internet rates too.
Oct 31 (Reuters) - The Biden administration on Tuesday will seek to impose new rules on retirement plan providers to close loopholes that officials argue allow the industry to sell products that boost their revenue at the expense of customers, the latest effort by the administration to crack down on so-called junk fees.

The proposed Labor Department rules require retirement plan providers to only sell commodities and insurance products, such as annuities, to clients when doing so is in the customer's best interest.

If you are really paying close attention they are putting the stranglehold and letting "normies" own very few commodities. There have been a lot of commodity ETF's that have disappeared lately. Things like NIB (Cocoa), JO (coffee), and quite a few others along those lines.
Hopefully this carries into the utility sector as well. The latest fee I am seeing is my phone company is now charging me to send me a bill and in addition they want 5 bucks for me to pay my bill.LOL.
From the link:

The U.S. House of Representatives today will vote on a spending bill that contains key amendments restricting funding for the Department of Labor’s (DOL) recently proposed fiduciary rule.

H.R. 5894, or otherwise known as the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, is sponsored by Rep. Robert Aderholt, and contains three amendments made by Republican state representatives that would deter funding to the Biden Administration’s latest proposal.

From the link:

During the debate on a bill for appropriations for the Departments of Labor, Health and Human Services, and Education, Rep. Ralph Norman (R-SC) introduced an amendment to prohibit funding for the Department of Labor to crack down on junk fees in retirement investing, claiming it would result in higher fees for Americans. Rep. Rosa DeLauro (D-CT) responded in opposition.

Figured this would fit right in...........

Is There an Establishment Plan to Repeal Antitrust Laws?​

Last Monday, one of the large number of Washington, D.C. insider trade publications - Politico - called out Biden antitrust policy as the single most problematic area for financiers. “In taking on tech giants and forcing the collapse of lucrative deals,” said Politico Morning Money, “Lina Khan has earned the status of Wall Street nemesis.” It’s true. The torpedoes launched last year - from rule-makings to challenges of Google and Spirit-JetBlue - are now exploding.

In this issue, we’re going to describe how the establishment is hitting back, in ways you don’t see, but which might become a political issue if the consultants and candidates who run campaigns actually notice what’s happening in Congress.

The short story is that big business is using partisanship to try and persuade Congressional Republicans, and some Democrats, to repeal antitrust laws, as well as drag antitrust enforcers before committees and harangue them in public. But among voters, within academia, and even in the conservative legal movement, antitrust is becoming far more relevant.

More here:

The thread is about bank junk fees. This vid is about junk fees in general. Figured it might fit in here. I'm halfway through and it's made me smile so I figured I'd share it. Almost 40 mins long.

How Hidden Fees Cost Americans Billions | CNBC Marathon​

Nov 25, 2023

Tipping in the United States is on the rise and experts are calling it tipflation. The pressure to tip well in front of the tip receiver, before a service is completed, or in front of other customers makes a difference for many. After customers swipe their credit card, they're typically prompted with three large tipping options on a screen. With Americans being pressured to tip higher percentages and for more services, the question is, where is the tipping point?

Americans are collectively spending nearly $65 billion on sneaky fees, according to the White House. “It really seems like companies have become addicted to junk fees,” Lina Khan, chair of the Federal Trade Commission, told CNBC. Junk fees are making companies billions of dollars richer. “I think part of the reason that a lot of companies are doing this is that investors and shareholders really like it. It’s another way to pull in more revenue without really competing,” Rohit Chopra, director of the Consumer Financial Protection Bureau, told CNBC.

FedEx, UPS and Amazon make deliveries on behalf of retailers advertising “free” shipping. But, none of those packages are being shipped for free. The cost of shipping is becoming ever-increasing. Companies like Amazon, Walmart, Target and even Etsy benefit from economies of scale because they generate mass online sales. This puts them at an advantage to achieve bulk discount rates from carriers. Watch the video above to learn why free shipping is a myth, what it really costs companies to send parcels around the country and how it impacts consumer sentiment.

00:00 — Introduction
00:32 — Why Tipping Is So Out Of Control In The U.S. (Published March 2023)
12:46 — How ‘Junk’ Fees Secretly Invaded The U.S. Economy (And How Pres. Biden Wants To Stop Them) (Published April 2023)
25:31 — The Hidden Cost Of Free Shipping (Published March 2022)
"Any corporation that has not brought their prices back down, even as inflation has come down, even as the supply chains have been rebuilt, it's time to stop the price gouging," Biden said at the launch of a new White House supply chain initiative. "Give the American consumer a break."
Prices for some everyday goods have fallen over the past year, a reality reflected in lower Thanksgiving costs this year, for example. And lower costs have in turn left some consumers with more money in their budgets for things like Black Friday shopping, when U.S. online sales rose 7.5% this past weekend over a year ago.

As Biden runs for reelection, the White House has sought to claim these broad spending and pricing trends as victories for the president and his economic agenda, dubbed Bidenomics.

But the argument that Biden deserves the credit for a strong economic recovery has proven to be a tough sell to voters, who consistently give the president low marks on the economy.

"We understand that people are still not feeling it, we get that," White House press secretary Karine Jean-Pierre said Monday, ahead of the president's supply chain event.

Faced with a skeptical audience, targeting so-called junk fees, which Biden said "companies sneak into your bill," offers the White House with a chance to directly show voters what Biden is doing on their behalf.

lol. "some consumers" have more money in their budgets for discretionary spending? What are they smoking? Are they (CNBC) even paying attention to what is happening to anyone not in the top quartile?

So the Biden admin makes it clear that the effort to target junk fees is purely a re-election publicity stunt.
The Consumer Financial Protection Bureau plans to dramatically slash overdraft fees at the largest banks by classifying overdraft services as extensions of credit and allowing financial institutions to recoup their costs or agree to charge a maximum fee of $14 under a benchmark set by the government.

Under a proposal to be released Wednesday, the CFPB plans to radically change how overdraft fees are calculated and charged by financial institutions that have more than $10 billion in assets. Banks and credit unions with less than $10 billion in assets would be exempt from the proposed rule.

Two years after many large banks eliminated or dropped overdraft and nonsufficient fund fees, the CFPB wants overdraft services to be classified as an extension of credit, subject to the same consumer protections as credit cards under the Truth in Lending Act that requires disclosures of annual percentage rates.

CFPB Director Rohit Chopra said that what began more than a half-century ago with banks offering overdraft services as a convenience to customers when bills were paid with paper checks has morphed into what he called "a junk fee harvesting machine." ...
The CFPB is seeking public comment by April 1. A final overdraft rule is expected to go into effect Oct. 1, 2025, due to TILA requirements.


New government regulations are slashing the late fees charged by many credit card companies.

On March 5, 2024, the Consumer Financial Protection Bureau (CFPB) finalized a rule limiting the penalty for late payment to $8 per incident, down from an industry average of $32. It is expected to go into effect 60 days after its publication in the Federal Register.


US consumer agency sued by banks, US Chamber over credit card late fee cap​

March 7 (Reuters) - The Consumer Financial Protection Bureau was sued on Thursday over its new rule capping late fees on credit cards at $8, which banking groups and the U.S. Chamber of Commerce say punishes consumers who pay their bills on time.

In a complaint filed in the Fort Worth, Texas, federal court, the fee's opponents accused the bureau of exceeding its authority, and ignoring Congress' intent that fees be high enough to deter late payments, ensure cardholder accountability, and compensate issuers for their costs when payments are late.

The plaintiffs include the Chamber, the American Bankers Association, the Consumer Bankers Association, and three Texas-based trade groups.

In a statement, the consumer bureau pledged to defend the rule, saying it "closes a longstanding loophole abused by credit card giants to turn late fees into a major revenue stream," and will save American consumers more than $10 billion.


To me the goverment has no right tell businesses what they can charge for, or the price they charge. Let the free market determine prices.
Of course in a rigged system like banking there is no free market.
Banking isn't a true free enterprise though. They get either (or both) a license from the Fed and insurance from the FDIC and are subject to regulations via those yokes.
A Texas judge has recused himself from a case challenging the Consumer Financial Protection Bureau's $8 credit card late fee rule.

On Thursday, U.S. District Judge Reed O'Connor recused himself from the case in which the U.S. Chamber of Commerce and five other trade groups are seeking to halt the late fee rule from going into effect.

The CFPB has accused the trade groups of "forum shopping" for filing the case in the U.S. District Court for the Northern District of Texas, where judges are considered favorable to industry.

Judge Mark T. Pittman, a Trump appointee, replaced Judge O'Connor, and is expected to decide soon whether to grant the trade groups a preliminary injunction to keep the late fee rule from going into effect. ...
The litigation over $10 billion in late fee revenue is expected to be decided soon, in part, because the CFPB has already been found to be unconstitutional in the U.S. Court of Appeals for the 5th Circuit that covers Texas, Louisiana and Mississippi. In 2022, three judges on the 5th Circuit ruled that the CFPB's funding structure violates the Constitution's structural separation of powers.

The Supreme Court is expected to rule by June on whether the bureau's funding structure is unconstitutional, and Judge Pittman could stay the rule until that decision, which is expected by June at the latest.

If you can't read the article above (gotta sign in to read) you can read a bit about it here:

US regulator says trade groups judge-shopped for credit fee lawsuit​

March 13 (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) said business and banking groups, including the Chamber of Commerce, engaged in "forum shopping" when they sued in Fort Worth, Texas to block a rule aimed at lowering credit card late fees.

The CFPB urged a federal judge there to deny an injunction blocking the rule while the case is in progress. The regulator said the lawsuit is likely to fail in part because it was filed in the wrong place.

The late fee rule passed last week applies only to around 35 of the largest card issuers, none of which is based in Fort Worth, the regulator said.


If interested, you can read more about the judge here:


Federal judge halts new U.S. rules limiting credit card late fees​

A federal judge on Friday temporarily blocked the U.S. government from trying to limit credit card late fees, siding with banks and other business lobbyists that had challenged the policy as unconstitutional.

The cap on penalties was set to take effect next week, but the new ruling from U.S. District Judge Mark T. Pittman, nominated by President Donald Trump in 2019, would block swift financial relief for millions of Americans who have fallen behind on their bills.

Under the contested policy, the Consumer Financial Protection Bureau (CFPB) sought to restrict most penalties for late or missed credit card payments to $8 per month, unless banks could point to data showing that they needed to charge more to make up for their financial losses.



Lawsuit over US credit card late fees rule must stay in Texas, court rules​

(Reuters) -The U.S. Consumer Financial Protection Bureau on Tuesday suffered a jurisdictional setback in a lawsuit challenging its new rule capping credit card late fees at $8 when a federal appeals court held the case should stay in Texas and not be sent to a judge in Washington, D.C.

The ruling by a three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals was a victory for business and banking groups challenging a key part of the crackdown by President Joe Biden's administration on "junk fees."

At issue is a rule that would block card issuers with more than one million open accounts from charging more than $8 for late fees, unless they could prove higher fees are necessary to cover their costs.

The CFPB had fought for months to move the case out of the federal court in Fort Worth, a venue that has become a favorite of litigants challenging the Democratic President's agenda and whose two active judges are Republican appointees.



Chase Bank threatens to make customers pay for upcoming changes​

JPMorgan Chase Bank (JPM) is contemplating a major change that will put extra strain on customers’ wallets in response to a recent crackdown by the U.S. government.

The bank, which has roughly 86 million customers, is reportedly planning to charge customers for a plethora of services, that have historically been free, such as having checking accounts or access to wealth management tools, according to a recent report from the Wall Street Journal.

“The changes will be broad, sweeping and significant,” said Chase CEO of Consumer and Community Banking Marianne Lake, while speaking to the Journal. “The people who will be most impacted are the ones who can least afford to be, and access to credit will be harder to get.”

The move from Chase comes after the government announced last year that it aims to cap the amount banks can charge customers overdraft fees, which currently exceed $30 at multiple banks. Chase currently charges customers $34 if their account is overdrawn by over $50 at the end of the day.


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