Biden is proposing a “garbage tax” bill to cut hidden fees for credit cards and concert tickets

CNN
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President Joe Biden on Wednesday announced new progress on his administration’s “competition agenda,” which specifically targeted frivolous fees, while asking Congress to pass legislation targeting hidden fees across multiple industries.

Those costs could “drain hundreds of dollars a year from the pockets of hardworking American families, especially people who are already struggling to make ends meet — but not anymore after today,”[ads1]; Biden said at the fourth meeting of the Presidential Competition Council on Wednesday.

The proposed legislation in partnership with the Consumer Financial Protection Bureau, called the Junk Fee Protection Act, would target four types of excessive fees:

In brief remarks before the meeting, Biden had called out credit card fees in particular as “a frivolous fee if there ever was one,” and said the new guidance from the CFPB would reduce those fees.

“Today’s rule proposes to cut these fees from $31 on average to $8,” he added. “This change is expected to save Americans tens of millions of dollars, approximately $9 billion a year in total savings.”

Biden urged Congress to pass the garbage tax bill, saying it would give “hardworking Americans just a little bit more breathing room.” It’s part of a plan, he added, to build “an economy that’s competitive and an economy that works for everyone.”

Rohit Chopra, director of the CFPB, noted before the announcement that “over a decade ago, Congress banned excessive credit card fees.”

“However, companies have exploited a regulatory loophole that has allowed them to escape scrutiny to charge an otherwise illegal frivolous fee,” he added in a statement to CNN. “Today’s proposed rule seeks to save families billions of dollars and ensure that the credit card market is fair and competitive.”

Another category of fees that frustrates many customers is event tickets sold online, where the surcharges are often high – and usually appear late in the checkout process when a customer is about to purchase.

For example, earlier this year, lawmakers grilled Live Nation president and CFO Joe Berchtold after a ticket sales debacle over exorbitant ticket fees. Although the company said Wednesday it supports reform, it also said it opposes the proposed legislation.

“We stand ready to work with the president and Congress on many common-sense ticket reforms while speaking out against proposed legislation that would benefit scalpers over artists and fans,” the company said in a statement.

Biden’s transportation department also took steps last fall during the previous meeting of the Competition Council to reduce “unnecessary hidden fees” from airlines and travel sites that the president warned were “weighing down family budgets.”