Last fall, the Biden administration – scant on accomplishments, embarked on a campaign to pressure airlines to ditch billions in so-called "junk fees" charged to travelers who want to check bags or change flights.
"You should know the full cost of your ticket right when you’re comparison shopping to begin with," said Biden last September, adding that the move would help families "pick the ticket that actually is the best deal for you."
While travelers were over the moon, flooding the DOT with letters urging it to adopt the policy, the airlines predictably pushed back, suggesting the move was both illegal and impossible.
Doug Mullen of Airlines for America, which represents giants like American, Delta, and United, cautioned against such transparency, arguing that it "would only cause customers confusion and frustration."
"The department should not regulate in this area," said Mullen.
This stance, however, contrasts starkly with how much coin the airlines are banking on said fees – as airlines raked in over $6.7 billion in baggage fees alone last year, the Washington Post reports in a rare act of journalism (perhaps written to explain why yet another Biden initiative is failing).
Fees, fees everywhere…
The federal push to reduce fees extends far beyond airlines – with auto dealers, ticket merchants, cable giants, banks and other industries sapping money from consumers via sneaky, unnecessary charges.
In the banking sector, the administration's attempts to limit credit card late fees have been met with staunch opposition. The industry, having profited over $14.5 billion from these fees, forewarns a legal battle, indicative of the broader corporate pushback.
Opponents include Citrigroup, JPMorgan Chase, Wells Fargo and Visa, whose various lobbying groups have been working to brute-force Washington DC to oppose the efforts. In May, the American Bankers Association joined two others in telling the CFPB that capping late fees would force them to reduce rewards offered to new and existing customers. The lobbyists also questioned whether the bureau even has the legal standing to act in the first place.
"The late fees are imposed because they work to deter late payment," the ABA and its allies told the agency.
Cable giants, including Charter and Comcast, have similarly responded via lobbying groups – resisting federal efforts to provide consumers with accurate data on service charges. Casinos, insurers, owners of large apartment complexes, and ticket sellers have also fought new federal regulations that would punish them if they conceal their true prices.
The Biden administration, meanwhile, continues to push. Lael Brainard, the director of the White House National Economic Council, emphasized the administration's commitment: "We know that junk fees resonate with American consumers. They don’t like being taken for suckers." This sentiment underscores the administration's strategy to align with consumer interests, perhaps with an eye on the upcoming elections.
The Federal Trade Commission and the Consumer Financial Protection Bureau are at the forefront of enforcing these changes. Samuel Levine, director of the Bureau of Consumer Protection at the FTC, highlighted the misleading nature of hidden fees: "If a consumer is led to believe something costs $10, and it costs $20, they’ve been misled."