Biden Announces Rules on Credit Card Late Fees and Junk Fees

It’s good to see you all. Nice to see you all in one spot. Look, director, thank you for that introduction and thank you all for the work of the Competition Council. Now it’s reducing cost and delivery results for the American people. I’ve said before, capitalism without competition is not capitalism, it’s exploitation, and that’s what we’ve been seeing. Although it’s some small scale in the minds of many people, when you add up those numbers, they’re gigantic. We’re taking it on. Here’s what’s happening. The pandemic disrupted the supply chains, we all know that. I remember, I didn’t think as many people had any idea what a supply chain was and we all learned really quickly. It drove up costs on everything from smartphones and automobiles. But it also, now those costs are making things have come down, but the prices haven’t come down. They’ve stayed up. They’ve stayed high, and the profits have soared.

(01:04)
It’s time for those prices to come back down. Look, the good news is inflation is the lowest it’s been in three years and last year alone, inflation came down by two thirds. We have one of the lowest inflation rates in the world. Many companies have done the right thing. They’ve helped lower costs for Americans, but even as supply chains are back to normal, some companies are still not passing along their savings to their customers. Many corporations are raising their prices, pad the profits, charging folks more and more for less and less. But in fact, some of the small snack companies, think you won’t even notice what they’re doing. And when they charge you just as much for the same size bag of potato chips, only it has a hell of a lot fewer chips in it. I’ll tell you who did notice. The cookie monster. He pointed out his cookies are getting smaller, paying the same price. I was stunned when I found out that actually happened.

(02:05)
But some companies are also adding junk fees. The hidden costs that are added to your bill without your knowledge. And some companies have been even caught breaking the law while overcharging consumers and the American people are tired of being played for suckers. I mean, it’s one thing no matter how much money you make, no matter how rich or poor or middle class are, you don’t like being taken advantage of. That’s why today I’m launching a new strike force on unfair and illegal pricing. To crack down on companies who break the law while keeping prices high for American consumers. The new strike force will be led by the Department of Justice and the Federal Trade Commission. If you keep prices high while engaging in illegal practices that are fraudulent or unfair or deceptive or anti-competitive, we will enforce the law. We will enforce the law.

(02:55)
Today we’re announcing that the Consumer Financial Protection Bureau is finalizing a rule that will help stop some credit card companies from ripping you off with late fees. Under the law, banks are not supposed to charge late fees that are higher than the cost banks that have to engage to collect the late payment, but we estimate banks are generating five times more in late fees than it costs to collect late payments. They’re padding their profit margins and charging hardworking Americans more than a cumulative effort, a number, $14 billion in 2022. With the announcement of this new rule, late fees are now going down to $8, $8. Instead of the current average of $32 late fee payments. This action will collectively save families $10 billion in credit card late fees every year. That’s the average of $220 in savings annually for more than 45 million Americans who typically have to pay late fees. That’s a lot of money.

(04:03)
And let me close with this. Fair competition is the key to my economic vision. To build an economy from the middle out and the bottom up, not the top down, and it’s working. Wages are up more than prices. Unemployment has reached historic lows. Families are finally getting a little breathing room. Prices are still too high and they shouldn’t be this high. That’s why we’re going to do everything we can to keep lowering costs for hardworking families. With that, I’m going to turn this over to Lael, the Director of National Economic Council, but I’m supposed to leave for a meeting with the Business Roundtable on the telephone, but I’m going to hang around and listen to it. So with your permission, I’d like to stay and my staff will tell me when the drop dead hour occurs, pass me a note.

(04:52)
But thank you all for all the work you’re doing. I really mean it. It makes a big difference. When I raised this issue a year or so ago with some of my team, they thought no one’s going to care much about it. Well, they didn’t sit at my kitchen table when I was growing up. I care a whole lot when you’re being played for a sucker no matter how much money you have. So thank you for what you’re doing. Lael, I’ll turn it over to you.

Well, Mr. President, I think the members of your Competition Council have been very busy since you last met with him about six months ago. We’ve also got a new member. Ambassador Tai has joined the Competition Council as well. And I thought what we might do is just start by hearing from several of your cabinet members about the efforts they’ve been undertaking over the last few months and the announcements they’re making. So I thought we would start with Secretary Vilsack to hear about the Department of Agriculture and then perhaps go to Secretary Austin to hear about the Department of Defense.

Oh, thank you very much, Madam Director. Mr. President. I’m very pleased to be here today to report on the progress that USDA has made under the competition executive order you signed to deliver benefits for farmers, ranchers, workers and American families. First, we finished the final rule on the inclusive competition and market integrity, which bans discrimination on the basis of sex, race, religion, disability, and more, including being a cooperative in the livestock and poultry markets. It’s going to prohibit retaliation against livestock producers and poultry growers for engaging in very basic activities, reporting to the government, forming an association of producers or more. For example, it protects livestock producers and poultry growers’ ability to communicate with each other and other packers and poultry dealers in search of new opportunities to compete or engage in price discovery. The rule also stops deception, including false or misleading statements and material missions in contracting, contract operations and contract termination.

(06:51)
As you can see from, there will be a slide in the slide deck. We’re also working hard at two more proposed rules. One tackles unfair and deceptive practices in poultry tournaments. The second reaffirms the longstanding position of USDA that harmed a competition along the lines of the Sherman and Clayton Acts should not be applied to backers and stockyard cases. We’re very close to publishing a final rule that aligns the product of the USA label with consumer understanding of what that claim means. We’re working on label standards and verification guidance for claims such as animal raised practices so that consumers can trust those labels. And lastly, we’re wrapping up the more than one billion dollars of investments that you challenged us to make in meat and poultry processing infrastructure this spring and summer, focused on small, independently-owned local facilities.

(07:43)
I’d like to highlight the steps we continue to take to promote transparency, the farmer’s voice and research access with the partnership of the United States Patent and Trade Office, we’re also helping farmers and plant breeders voice their expertise in support of robust patent examination process. Next, in partnership with the Patent Office, we’re working on steps to promote research access to seed [inaudible 00:08:07]. All of this Mr. President, is going to provide additional competition, more choice and lower costs for consumers. And that’s just a few of the many ways we’re promoting competition at USDA from domestic and sustainable fertilizer capacity, which you ordered, to food system transformations and more. USDA is using our expertise in balance sheet to bring down prices for consumers, promote fairness for farmers and workers with the Department of Justice and shoring up the resiliency in our food and agriculture supply chain, all of which you directed and challenged us to do.

Can I ask a question? What kind of a response you’re getting from farmers? Particularly livestock producers?

Mr. President, they welcome these changes. For far too long they felt that they were at the mercy of a relatively small number of integrators and processors. So to the extent that they now have more options to be able to process their cattle at local and independently-owned processing facilities, some of which are farmer-owned, to the extent that they know that they have a balanced playing field, that they understand better who they’re doing business with, they understand that they have certain rights that they can in fact seek a better deal. All of that, I think, is something that’s been very much desired in the marketplace across all farm groups and across all associations. So this is very, very popular with farmers.

I remember you raises me almost four years ago on a trail in Iowa, and it’s good to see it’s underway. What’s the next most important step? I’m not going to ask everybody these questions. I’m just curious.

I think Mr. President, it’s basically providing an opportunity for small and mid-sized farming operations to stay in business. Previous administrations have taken the attitude that you ought to get it big or get out. That’s really helping the large scale farming operations. Your administration for the first time is creating an option so that people can stay in business and pass their farms onto their families. I can’t emphasize how important this is. We’ve lost 554,000 farms since 1981. That’s all the farmers today in North Dakota, South Dakota, Minnesota, Wisconsin, Illinois, Iowa, Nebraska, Colorado, Missouri, and Oklahoma. Gone. Your administration is trying to put a stop to that.

Thank you. Thank you.

Yeah, I think that’s a great example of the many ways that by giving small farmers, small ranchers a fair shot, we’re also helping to bring prices down for American consumers on things like poultry and meat. One of the unique facets of the Competition Council is that we’ve really seen every cabinet agency increasing competition. And I think Secretary Austin has undertaken a number of really important initiatives at the Department of Defense. So Mr. Secretary, perhaps you’d like to talk about those next.

Thanks, Lael. Mr. President. As you know well, competition is vital to our defense industrial base. And to keep America secure, we need to make our defense industrial base even stronger. In January, the department released our first ever National Defense Industrial Strategy. That’s our blueprint for building a more resilient defense industrial base that’s postured to deliver capabilities to our war fighters at speed and scale. And that means expediting or expanding our relationships with small and non-traditional companies and industries to diversify our supplier base and lowering barriers to enter in the defense marketplace. And so over the next six months, Mr. President, we’ll keep pushing to implement that strategy and foster a more resilient, modern and competitive defense industrial base.

(12:14)
Now, Putin’s ongoing assault on Ukraine has underscored how important this is. Our security assistance has kept the Ukrainians in the fight and saved lives, and it’s also strengthened our economy. These investments have expanded facilities and created jobs for American workers. And the weapons that we’ve sent to Ukraine to help defend itself are made in America by American workers nationwide, from Texas to Ohio, to Arizona. Now Ukraine’s fight also shows that we urgently need to expand our own production capabilities and coordinate even more closely with our partners and allies. And we need Congress to pass the national security supplemental and the full year appropriations so that we can keep investing in our industrial base. And I appreciate everyone here and your support to make the President’s executive order a reality. These initiatives will promote competition and revitalize our defense industrial base to keep America safe in the 21st century. Thanks.

[inaudible 00:13:29] I’d better not start your questions, I’ll get in trouble.

What’s your message for [inaudible 00:13:38]-

Thank you so much [inaudible 00:13:38]. Thank you.

… [inaudible 00:13:38] Super Tuesday.

Thank you.

Say you have a message for voters?

[inaudible 00:13:39] thank you so much. Thank you all.