Regulatory Agencies Focus On "Junk Fees"

The Biden Administration announced a crackdown on "junk fees" on October 26, led by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC), with the goal of "saving Americans, collectively, billions of dollars in unfair fees." The term "junk fees" has been used by regulators broadly to refer to allegedly unfair or surprise fees or fees for unexpected or unwanted services that provide little to no benefit to the consumer. Common examples include overdraft fees, service fees, processing fees, booking fees, cleaning fees, late fees and termination fees. President Biden asserted that junk fees are not simply an irritant—they "weaken market competition, raise costs for consumers and businesses, and hit the most vulnerable Americans the hardest." President Biden's announcement builds on aggressive rulemaking and enforcement efforts by the FTC and CFPB, and there is every indication that those efforts will intensify.