Banking

Biden hits new midterm note, targeting ‘junk’ banking and airline fees

President Biden has added a last-minute boast about his administration’s efforts to eliminate surprise banking and airline fees to his stump speech, just four days from midterm elections that will determine whether Democrats retain control of Congress.

“I’m doing away with unfair hidden fees,” Biden said at a Democratic Party rally in Albuquerque, New Mexico, on Thursday, before making similar remarks in suburban California. “You bounce a check, and you have to pay $35 bucks or $50 bucks. You have an excess credit card fee of $50 bucks if you’re late on your payment. Ending those. They’re gone.”

Rising prices and fears of a coming recession have dragged on Democrats’ prospects heading into next week’s vote, and the White House has struggled to persuade Americans that Biden’s policies will reduce their household costs. The president has previously pointed to measures he’s signed into law that would cut some prescription drug prices in Medicare and extend Affordable Care Act subsidies.

The Transportation Department and Consumer Financial Protection Bureau have been signaling a crackdown on airline and banking fees for months, although Biden has only recently begun to mention them on the trail. The CFPB released guidance last week at a White House event, following rulemaking in June on bank charges Biden derided as “junk fees.”

It isn’t clear if Biden and Democrats can capitalize on the issue with voters, with polls suggesting headwinds for their party in the waning days of the campaign.

“You bounce a check, and you have to pay $35 bucks or $50 bucks,” President Biden said at a Democratic Party rally in Albuquerque, New Mexico. “You have an excess credit card fee of $50 bucks if you’re late on your payment. Ending those. They’re gone.”

Bloomberg News

Some 46% of Americans surveyed by Monmouth University last month said inflation was an extremely important issue to them — up from 37% in September and far outpacing any other issue. In the same poll, 63% of Americans said they wished Biden would give more attention to the issues important to their family.

Critics of the president have said many of Democrats’ key policies do not address core expenses for Americans, especially groceries, rent and gas prices. The war in Ukraine, which Biden often cites, has pushed many of those prices higher with key food exports and oil supply limited from the region.

The president also brought up airline costs for parents reserving adjacent cabin seats for their children at a San Diego rally for Rep. Mike Levin.

“You have to get in a plane and you take along your kid. You’re going to find out you got a hell of a charge to have your child sit next to you,” Biden said. 

The Transportation Department in July issued a notice encouraging airlines not to charge fees for seating children 13 and under with a parent. 

“If the plane is late and you have to get a new ticket, you’re not gonna get paid for it, so these are all hidden fees,” the president added, referencing proposals to strengthen ticket refund rules.

“No more,” Biden bellowed to applause.

Transportation Secretary Pete Buttigieg, who has also hit the campaign trail for Democrats this cycle, has been the administration’s point person for managing large-scale flight disruptions at airports still adjusting to a post-pandemic travel boom.

CFPB Director Rohit Chopra has been an outspoken critic of so-called junk fees since taking the helm of the watchdog, likely prompting moves from Capital One Financial, Bank of America and other major banks to suspend or lower overdraft charges in the last year.

“The CFPB guidance was probably going to happen anyway. The only question was when,” Ian Katz, an analyst at Capital Alpha Partners, said in a note. “The timing is more connected to midterm elections.”

CFPB had already issued rulemaking in June to prohibit some of the charges, including credit-card late fees and payment transfer fees.

“Americans are telling us that they’re tired and frustrated of getting hit by junk fees in their financial lives,” Chopra said at the White House event last week. “We’re putting companies on notice about their obligations under the law.”

— With assistance from Alan Levin and Mary Schlangenstein

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