Biden moves to slash U.S. credit card fees, app charges

Biden moves to slash U.S. credit card fees, app charges

By Douglas Gillison

WASHINGTON (Reuters) – The White House on Wednesday was due to announce fresh efforts to slash credit card late fees and drive down the prices that Apple Inc and Google parent Alphabet Inc charge on mobile app stores, part of a larger policy drive to promote competition in consumer markets, officials said.

President Joe Biden was also set to urge Congress to ban hidden “junk fees” and penalties that a federal consumer watchdog says are creeping into everyday retail services across industries, driving up consumer costs, including fees airlines charge for family members to sit next to young children, White House officials said.

Biden has been beating the drum on inflation, criticizing Republicans who now control the House of Representatives for backing tax measures that he said would benefit the wealthy at the expense of middle-class taxpayers.

Biden, who is expected to announce a bid for re-election in the coming weeks, has also been slamming Republicans for their refusal to approve an increase in the U.S. debt ceiling unless there is a deal on spending cuts. Wednesdays announcement coincides with a scheduled meeting between Biden and House Speaker Kevin McCarthy that is likely to mark the start of protracted maneuvering on raising the $31.4 trillion borrowing cap.

The Consumer Financial Protection Bureau will propose on Wednesday a rule to ban “excessive” fees that credit card issuers charge for late payments, something the bureau estimated costs consumers $12 billion a year.

“When someone misses a credit card payment, even if they paid just a day or two late, or even a few hours, they can be hit with a cascading series of fees,” CFPB Director Rohit Chopra told reporters in a Tuesday call.

Chopra said such fees far exceeded any additional costs that lenders incurred and said the rule would cap a regulatory threshold at $8, a level indicated by CFPB data analysis.

Chopra said that after a comment period, the rule could take effect in 2024. However, regulations are frequently subject to challenge and litigation by industry groups that can block or delay them.

The National Telecommunications and Information Administration (NTIA), an arm of the Commerce Department, is releasing a report denouncing the market dominance enjoyed by Apple and Google in the app economy, where the vast majority of smartphone users and developers are hemmed inside the tech giants software ecosystems, which the NTIA said drives up costs and limits innovation.

The report calls for greater user control over which applications are available, an end to platform operators‘ “self-preference” for their own apps, and a ban on requirements that apps use the operators’ in-app payments systems.

The White House said the Transportation Department on Wednesday will propose regulations to bar airlines from charging family members to be seated next to children age 13 or younger. The department will disclose on a government dashboard which airlines do not charge such fees.

Wednesday‘s announcements will mark the fourth meeting of Biden’s Competition Council, created in 2021 when consumer inflation was at 40-year highs and was widely seen as a political headwind ahead of the 2022 midterm elections.