Prepared Remarks by NEC Director Lael Brainard on Safeguarding Consumers at the National Consumer League Trumpeter Awards

The Biden-Harris Administration’s Commitment to American Consumers

The National Consumer League (NCL): Advocating for Consumer Rights

The National Consumer League (NCL) has a rich history spanning 124 years, dedicated to safeguarding consumers and promoting fair and safe working conditions. As Florence Kelley, a prominent NCL leader, once said, “To live means to buy, to buy means to have power, to have power means to have responsibility.” We extend our gratitude to the NCL for their tireless efforts on behalf of consumers.

President Biden: Fighting for American Consumers

President Biden is committed to continuing the legacy of fighting for American consumers. He understands firsthand the struggles faced by families who must prioritize bills due to financial constraints. This is a reality far too many Americans experience, and the President aims to alleviate their burdens.

Bringing Down Costs: A Focus on Kitchen-Table Economics

The key to the President’s kitchen-table economics agenda is reducing costs to provide relief for hardworking Americans. Prescription drugs and healthcare expenses are a significant financial burden for many families, who often pay exorbitant prices compared to other countries.

President Biden achieved a significant victory for the American people with the passage of the Inflation Reduction Act (IRA). As a result, seniors now pay only $35 per month for insulin, down from $400. This legislation has also prompted private sector voluntary commitments, expanding access to affordable insulin for more Americans.

In addition, the President’s administration has ensured that medical debt will no longer negatively impact the credit scores of millions of Americans. The forthcoming rule proposal from the Consumer Financial Protection Bureau (CFPB) aims to exclude medical debt from consumer credit reports. This change will enhance credit scores, making it easier for individuals to secure affordable mortgages and save thousands of dollars.

Furthermore, the Competition Council is dedicated to promoting competition across all sectors. As a result, millions of Americans can now purchase hearing aids over the counter, saving up to $3,000. This achievement stems from an FDA rule that introduced more competition into the hearing aid market.

Cracking Down on Hidden Fees

Hidden fees embedded in various services can accumulate and pose a significant burden on consumers. While these fees may seem inconsequential to some, they greatly impact hardworking Americans struggling to manage their bills. The Consumer Financial Protection Bureau’s efforts to curb overdraft and bounced check fees alone are estimated to save consumers $5.5 billion annually.

Research indicates that consumers often pay up to twenty percent more due to hidden fees, compared to the actual price they would pay if given the opportunity to compare prices transparently. Take the example of Marc from Arizona, who wanted to attend a baseball game with his son and brother. After selecting the cheapest ticket within his budget, he discovered additional service fees, facility charges, and processing fees. These extra costs amounted to $50, making it impossible for him to afford the game. Similar stories of excessive add-on fees are common, such as individuals paying nearly $400 in fees when purchasing airline tickets for a family trip.

These fees disproportionately affect middle-class Americans who are increasingly discontented with them. Surveys indicate that 75 percent of Americans, regardless of political affiliation, support action against these hidden fees.

Moreover, when companies utilize hidden fees to advertise lower prices, it creates unfair competition for honest businesses that transparently display the total cost. This discrepancy misleads consumers into believing that other companies charge higher prices, when, in reality, they are merely more forthright about the final amount customers will pay.

Addressing Junk Fees: New Actions

In the Rose Garden, President Biden, alongside CFPB Director Rohit Chopra and FTC Chair Lina Khan, announced new actions to tackle junk fees. The Federal Trade Commission (FTC) proposed a rule that mandates businesses to disclose the all-in price upfront, including any mandatory fees, their purpose, and refundability. This requirement applies to event tickets, hotel and lodging, apartment rental applications, car rentals, and more.

The Consumer Financial Protection Bureau (CFPB) also shared its plan to issue guidance preventing banks with assets exceeding $10 billion from imposing fees for basic services. Consumers should not have to pay additional fees to check their loan balance, access their account records, or check their account balance at another bank’s ATM. Many banks currently charge these fees, which can reach $20 or $30 for certain services.

Additionally, the CFPB aims to propose a rule that facilitates easier bank switching for consumers. This rule would allow customers to securely and seamlessly transfer their banking transaction data to another bank. By fostering competition among banks, this initiative encourages the provision of better and more affordable services. It stands as a cornerstone of the President’s Executive Order on Promoting Competition in the American Economy.

Past Achievements and Continued Progress

The aforementioned actions build upon the progress already made. Bounced check fees have decreased by 86% in less than two years, resulting in nearly $2 billion in consumer savings. The President and the Department of Transportation effectively called out airlines for charging parents to sit next to their children on flights. As a result, four major airlines now offer this service for free, and the Department of Transportation plans to establish mandatory rules.

The Federal Communications Commission (FCC) has developed a standardized label, similar to nutrition labels on food products, to provide consumers with transparent information about the cost and quality of their internet service upfront.

Furthermore, actions are not limited to the federal government. States across the country have proposed legislation, and bipartisan bills have been introduced in Congress to address ticketing and hotel resort fees. Companies, including airlines, ticketing platforms, hotels, rental housing providers, and food delivery apps, have proactively taken steps towards transparent pricing.

The Biden-Harris Administration remains committed to advocating for American consumers, ensuring fair treatment, and promoting a competitive marketplace. Through comprehensive measures, they seek to alleviate financial burdens and empower hardworking Americans.

Read More of this Story at – 2023-10-12 00:30:00

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