WASHINGTON–As many had predicted, during his State of the Union address, President Joe Biden attacked “junk fees” and touted an announcement earlier in the week by the CFPB that it is capping credit card late fees.
“I’m also getting rid of junk fees, those hidden fees added at the end of your bills without your knowledge. My administration just announced we’re cutting credit card late fees from $32 to just $8,” Biden said. “The banks and credit card companies don’t like it. Why? I’m saving American families $20 billion a year with all of the junk fees I’m eliminating.”
Earlier in the week, a number of analysts and Hill advocates speaking to America’s Credit Unions’ Governmental Affairs Conference in Washington were told the Tuesday announcement by the CFPB of a cap on credit card late fees of $8 was being announced so it could be included by the President in his address.
Not a 'Frivolous' Fee
Following the State of the Union, America's Credit Unions issued a statement criticizing how the president has characterized card fees.
"Credit unions work every day to protect and enhance the lives of their members," said the trade group's president and CEO, Jim Nussle. "America’s Credit Unions has repeatedly pushed back against lumping legitimate, value-based fees with frivolous ones and will continue to support the ability for credit unions to decide what products and services best fit their members’ needs. With more than 43 million financially vulnerable Americans, America’s Credit Unions believes the real-life impact credit unions have on the 140 million consumers they serve is a better measure of success than government intervention by the CFPB. Every American deserves the ability to belong to a credit union.”
‘Cost of Credit is Going to Skyrocket’
Earlier in the day on Thursday, Republican members of a House Financial Services subcommittee had also criticized the move, calling it an election year stunt that means the “the cost of credit is going to skyrocket,” as CUToday.info reported here.
The new fee cap applies to issuers with more than one-million active accounts, which the CFPB said is designed to exempt smaller issuers, such as most credit unions.
But during her testimony before the House subcommittee on Thursday, Karen Harbin, CEO of Commonwealth Credit Union in Kentucky, said the cap will only become a competitive advantage for larger issuers who can afford to limit their late fees.
Biden Talks Other Fees, Too
The attacks on fees, however, are expected to continue given it’s an election year and the issue is popular with Americans.
During his State of the Union Biden also noted his administration has to require cable, travel, utilities, and online ticket sellers to “tell you the total price upfront so there are no surprises. My Administration is also eliminating title insurance fees for federally backed mortgages. When you refinance your home this can save you $1,000 or more. “
Now With Free Shipping! The CUToday.info Daily News Email Keeps Getting Better!
The biggest, best and freshest news reporting in credit unions remains free, and now has an added bonus---free shipping to your email address! That’s right. Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So stop paying those bank-fee-like subscription prices from other so-called “news” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?