FTC & CFPB Fight to Save Billions for Consumers by Cracking Down on Junk Fees

October 11, 2023 Press Release

Washington, D.C. — The Biden-Harris administration announced new actions today to rid the economy of junk fees and promote competition, including a proposed rule banning “hidden and bogus” fees across the economy from the Federal Trade Commission, new guidance from the Consumer Financial Protection Bureau to stop big banks from charging excessive fees for basic services, new data proving the millions in savings for consumers from junk fee crackdowns, along with momentum from the Office of Information and Regulatory Affairs to help agencies better develop and analyze regulations with competition in mind. In response, the American Economic Liberties Project released the following statement.

“Junk fees aren’t just a nuisance; they’re a billion-dollar rip-off squeezing nearly every American’s wallet,” said Faiz Shakir, Interim Executive Director of the American Economic Liberties Project. “With a new proposed rule today from the FTC to flat out ban junk fees across the economy, and continuing efforts from the CFPB to zero in on excessive fees across financial markets, the Biden-Harris administration is standing up for working families. From banking to credit cards, hotels to airlines, and  healthcare to entertainment, big corporations all across the economy abuse their market power to nickel and dime working families and undermine fair competition. We commend these efforts to combat junk fees from the FTC, CFPB, and the President, and look forward to their finalization.”

The FTC’s proposed rule seeks to eliminate “hidden and bogus” fees that can raises prices on consumers across the economy. The rule would ensure that businesses disclose all mandatory fees upfront, facilitating easier price comparison for consumers, and prohibit bait-and-switch pricing tactics. Furthermore, businesses would not be able to misrepresent fees or be vague about their purpose. This rule aims to not only protect consumers from deceptive pricing but also to foster an honest business environment where companies present total prices transparently from the outset.

A new advisory opinion from the CFPB today clarifies that large banks and credit unions cannot impose excessive fees on customers seeking basic information, such as checking bank account balances or getting account information needed for applications. Confirming the effectiveness of the agency’s approach to tackling junk fees, the agency also released new data showing that “bounced check fees are down more than 86 percent since 2021—saving consumers nearly $2 billion,” and that almost two thirds of large banks have rid these fees for good.

Junk fees have grown in prevalence over the years, with online sellers using methods like drip pricing and partitioned pricing to conceal the true cost of the goods and services they sell to consumers and businesses alike. The White House estimates that junk fees are costing consumers tens of billions of dollars each year, with $9 billion per year in banking alone. The Biden-Harris administration estimates that it has achieved an average of “$170 in annual savings” for the 33 million households that pay these fees.

New guidance from OIRA bolsters the Biden-Harris administration’s commitment to embedding a competition policy framework into its policymaking goals, ensuring that new regulations not only achieve the administration’s policy goals, but also promote competition. Economic Liberties submitted a comment in June urging the Office of Management and Budget — where OIRA lives — to further develop its proposed version of Circular A-4 to reflect both the contemporary understanding of market power and its place as a priority for regulatory action in the Biden administration.

To learn more about how comprehensive federal legislation to tackle junk fees,  read Economic Liberties’ model legislation here.

For more on how state policymakers can can take action against junk fees, read our state junk fees playbook here

Learn more about Economic Liberties here.


The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.