White House Pushes States to Join Crackdown on “Junk Fees”

Mar 10, 2023Federal Regulation, News

White House officials and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra recently urged states to join their effort to crack down on “junk fees” that the officials say are “unnecessary, unavoidable, or surprise charges.” The Biden administration and agencies like the CFPB and the Department of Transportation have proposed rules in efforts to reduce surprise fees for consumers.

According to Reuters, the CFPB released a guide mapping out actions for states to take. “These junk fees, which are often not disclosed upfront and only revealed after a consumer has decided to buy something, obscure true prices and dilute the forces of market competition that are the bedrock of the U.S. economy,” the guide said.

Susan Rice, Biden’s domestic policy advisor, said that some fees were tacked on without the consumer’s knowledge, such as bank overdraft fees or fees that appear after a hospital visit. The White House recently hosted a virtual meeting with state legislators, and some shared their efforts to reduce or get rid of junk fees by passing new laws or changing their contracts with third-party providers.

“Most states, just like at the federal level, have a prohibition on unfair and deceptive practices,” Chopra said at the meeting. “States can also enforce a prohibition on certain abusive acts and practices.”

Marcia Fudge, Housing and Urban Development Secretary, urged in a recent letter for housing providers and state and local governments to protect consumers—especially those with low and modest incomes who are hit the hardest—from “hidden, duplicative, or unnecessary fees.”

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