Instant Insight

30-Second Take

• The Biden administration has launched a series of initiatives to crack down on ‘junk fees’ and make it easier for consumers to cancel subscriptions.
• New rules aim to eliminate hidden and surprise fees, particularly in industries like credit cards, live events, and short-term lodging.
• The administration estimates these efforts will save consumers over $20 billion annually.

Quick Brief

2-Minute Digest

Essential Context

President Biden’s administration has been proactive in tackling what it calls ‘corporate rip-offs’ through various regulatory measures. The latest actions include establishing a Strike Force on Unfair and Illegal Pricing and implementing new rules to reduce junk fees and simplify subscription cancellations.

Core Players

• President Joe Biden – Initiator of the anti-junk fee and subscription reform efforts
• Federal Trade Commission (FTC) – Key agency in implementing the Junk Fees Rule and ‘click to cancel’ regulations
• Consumer Financial Protection Bureau (CFPB) – Finalized rule to reduce credit card late fees
• Department of Justice (DOJ) – Co-chairs the Strike Force on Unfair and Illegal Pricing with the FTC

Key Numbers

• $20 billion – Estimated annual savings for consumers from eliminated junk fees
• $10 billion – Annual savings from reduced credit card late fees alone
• $8 – New maximum credit card late fee, down from $32
• 45 million – Number of people affected by credit card late fees annually
• 72,000+ – Public comments received on the FTC’s Junk Fees Rule

Full Depth

Complete Coverage

The Catalyst

President Biden’s commitment to reducing corporate rip-offs and promoting fair competition has been a cornerstone of his administration’s economic policies. The latest initiatives are part of an ongoing effort to protect consumers and lower costs.

“We’re going to make sure corporations are held accountable when they try to rip off Americans,” President Biden emphasized.

Inside Forces

The administration has formed a Strike Force on Unfair and Illegal Pricing, co-chaired by the DOJ and FTC, to combat anti-competitive practices across various sectors, including prescription drugs, healthcare, food, housing, and financial services.

The CFPB has finalized a rule to slash credit card late fees from $32 to $8, saving consumers $10 billion annually.

Power Dynamics

The FTC and other agencies are playing crucial roles in implementing these regulations. The FTC’s Junk Fees Rule, for instance, requires clear disclosure of mandatory fees in industries like live events and short-term lodging.

“Companies often deliberately design their business processes to be burdensome or hard to navigate,” said Neera Tanden, President Biden’s domestic policy advisor.

Outside Impact

The new regulations are expected to have a broad impact on consumer finances and market practices. For example, the ‘click to cancel’ rule will make it easier for consumers to cancel subscriptions, similar to how they were signed up.

Industry opposition and court challenges have been obstacles, but the administration remains committed to these reforms.

Future Forces

Looking ahead, the administration plans to continue its crackdown on junk fees across other sectors. The FTC is likely to expand its rules to cover more industries, and the Strike Force will continue to root out illegal pricing practices.

• Regulatory actions against hidden fees in auto dealerships and retirement products
• Proposed rules to ban early termination fees for cable and satellite services
• Mandatory all-in pricing for cable and satellite services

Data Points

• March 2024: Launch of the Strike Force on Unfair and Illegal Pricing
• March 2024: CFPB finalized rule on credit card late fees
• August 2024: FTC proposed ‘click to cancel’ rule for subscriptions
• January 2025: FTC finalized Junk Fees Rule for live events and short-term lodging