President Joe Biden vowed to end the widely condemned practice of adding unforeseen costs to consumer goods and services during his State of the Union address last month. “I know how unfair it feels when a company overcharges you and gets away with it,” said Biden to a joint session of Congress. “Not anymore.”
The White House followed up by calling on Congress to pass a Junk Fee Protection Act, a proposal that has yet to be introduced or defined in legislative terms on Capitol Hill, where, despite the near-universal unpopularity of junk fees (96 percent of Americans surveyed by Consumer Reports in 2019 found hidden costs “annoying”), the practice has found defenders in the Republican-led House Financial Services Committee.
“Technically, junk fees don’t exist, OK? That’s a figment of Rohit Chopra’s imagination,” Congressman Blaine Luetkemeyer told The New Republic on Monday afternoon. “It’s a made-up word for a made-up authority that he’s got,” continued the Missouri Republican, referring to Consumer Financial Protection Bureau Director Rohit Chopra.
On the one hand, Luetkemeyer has a point: “Junk fees” is not a legal term, yet—but it’s been in the consumer affairs lexicon for decades to describe the unpopular practice of businesses adding unanticipated costs to consumer goods and services.
On the other hand, during his seven terms in Congress, Luetkemeyer has been on the take for millions in contributions from insurance, financial services, and utilities companies—industries long known to saddle consumers with hidden costs and, to borrow a term, junk fees.
Luetkemeyer is not alone in raking in campaign cash from industries that Chopra and the CFPB seek to regulate on behalf of American consumers. North Carolina GOP Congressman Patrick McHenry, the new chair of the House Financial Services Committee, has also raked in millions during his career in the House of Representatives from the industries over which his committee has direct jurisdiction: nearly $2.7 million from the securities and investment sectors, nearly $2 million from the insurance industry, and more, according to OpenSecrets.org.
“Patrick McHenry and Blaine Luetkemeyer are point men for the MAGA majority plan to let big banks, Wall Street lobbyists, and predatory lenders write their own rules and evade accountability when they mistreat consumers,” said Liz Zelnick, a consumer advocate for Accountable.us. The organization has launched a campaign aimed at raising awareness about the close ties the two GOP lawmakers have to industries making billions of dollars from junk fees.
Zelnick is one of many consumer watchdogs, including Chopra, who have been zeroing in on junk fees since last month’s State of the Union address. “Service charges inflate ticket prices, resort fees hike our costs to stay in hotels, and our phone bills are often laden with mystery charges,” wrote Chopra on CFPB’s website in January. “These junk fees make it harder for us to choose the best product or service, since the true cost is hidden.”
Luetkemeyer disagrees. “The bottom line is that all of these different fees and service charges, whatever the different charges are on the bill, are explained in the fine print of all your bills, but you need to read it,” he said. The New Republic asked Luetkemeyer if he reads the fine print on all of his purchases. “I don’t read the fine print on any of that stuff,” he said. “I’m a busy guy.”
Not all of Luetkemeyer’s House GOP colleagues share his enthusiasm for junk fees. Congressman Chip Roy decried the hidden fees in his live concert ticket purchases from Ticketmaster. “I’m a live music guy,” said the Texas Republican. “It is concerning as a user of the service that you often seem like you’re gettin’ screwed every time you wanna go get a ticket, and you go, ‘How much are those fees? What?’ At some point that seems to be a problem.”
Byron Donalds, another Republican on the financial services committee, also diverged with Luetkemeyer, to a point. The Florida Republican said he’s not opposed to addressing junk fees but that the committee has bigger priorities in the 118th Congress. “There’s a lot of things that the members of the committee are thinking through,” said Donalds. “I would probably say that fee structures is toward the end of that list.”
Senate-side, Democrats are eager to see a legislative proposal on junk fees from the White House. “I’m glad the administration is working on it,” said Ron Wyden, chair of the Senate Financial Services Committee. “We’ve been concerned about this for some time.”
Still, in the parlance of Congress, a callout in the State of the Union is not a legislative proposal, and a legislative proposal is not an actual bill. “We have yet to see a legislative proposal from the White House on it,” said McHenry, the House financial services chair. “So we’ll take a look if they send one over.” They’ll take a look—and from the sound of things, that’s probably about all.