Junk Fees and Related Pricing Practices

 The White House is taking interest in hidden fees, both  because they interfere with competition on price (e.g. when Ticketmaster reveals fees only as someone tries to complete a purchase), and because they sometimes seem unconscionable.  Here's a White House statement.

The President’s Initiative on Junk Fees and Related Pricing Practices

"The Biden-Harris Administration is taking action on junk fees that hurt Americans’ pocketbooks and the economy."

"Exploitative or predatory fees. Excessive fees that target consumers who have limited alternative options – because they are locked into a product or service, or are otherwise economically vulnerable – can likewise impose a financial burden. As the CFPB explains, a sign of exploitative fees is that they “far exceed the marginal cost of the service they purport to cover.” Bank overdraft fees, which greatly exceed the bank’s cost of credit, and surprise “termination fees” are leading examples."

HT: Susan Athey

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Regarding bank overdraft fees, my sense is that these drive lots of people away from the formal banking system and into the hands of high-interest-rate check cashing and payday loan services. Since we already regulate some debit card fees, I wonder if banks can't be encouraged to have some kind of debit-card-only "checking" accounts. Those would be able to prevent overdrafts, so they should be very cheap to administer, and would allow people to avoid paying very high fees and interest rates to non-bank financial services.