Joe Biden’s antitrust adviser has warned of an “overabundance of junk fees” in the US economy as he urges extending the war on hidden costs to those affecting investors in the securities market.
In an interview with the Financial Times, Team Wuthe Biden administration’s competition policy adviser, said there was “a feeling that there has been an abundance of junk fees throughout the economy, things that confuse people, enforcement fees, deceptive practices.”
He added that this is “a perfect area for a whole government . . . Approach” to surprise fees that push prices up unexpectedly.
Wu’s comments come as the White House has begun working with the Securities and Exchange Commission to bring junk fees in the securities market into the “broader mandate” of the Competition Council created by biden contribute to reducing market concentration.
The Council consists of the heads of several federal agencies, including the SEC, and is responsible for the implementation of the supreme command signed by the President last year to curb corporate power throughout the US economy, from transportation to technology to banking.
Wu, an architect of the order, is part of a new breed of progressive antitrust officials — including Jonathan Kanter, head of the Justice Department’s antitrust division, and Lina Khan, chair of the Federal Trade Commission — appointed by Biden to fight antitrust. Competitive Behavior in Corporate America.
The Competitiveness Council’s responsibilities include understanding how junk fees manifest across different industries and bringing down those hidden costs, an initiative endorsed by Biden in a speech Just days before the midterm elections.
After unveiling new guidelines from the Consumer Financial Protection Bureau, which has focused on unfair pricing to curb illegal “surprise” bank fees, Biden warned, “We’re just getting started. There are tens of billions of dollars in other junk fees throughout the economy and I have directed my administration to reduce or eliminate them.”
An SEC official said the agency has submitted several initiatives to the Competition Council, adding that the regulator is more focused on expanding fee disclosures than imposing outright bans.
Measures include the SEC’s February proposals to increase disclosure of fees charged by private funds to investors, and rule changes passed in October that require funds to clarify shareholder reports and provide transparent and balanced information in promotional materials present, the official said.
The SEC is working with brokers and advisers to be more cost-conscious in its recommendations to retail investors, the official said, for example by considering account fees and transaction costs when making recommendations to clients.
Wu said the securities regulation offers “low-hanging fruit” to improve pricing, a sign the White House is expanding its fight against junk fees from businesses facing consumers, such as airlines and banks.
However, he added that there are “other ways” to challenge hidden costs in the securities market beyond existing SEC initiatives. He said the White House is in the “early stages” of assessing what constitutes junk fees and possible securities remedial action.
Wu pointed to healthcare and maritime shipping as other areas where pricing should be reviewed. “The main problem with healthcare is that there aren’t really a lot of prices. . .[but rather issues]like surprise bills where people suddenly have a $15,000 bill they weren’t expecting.” In the shipping industry, regulators have since proposed Rules the obligation of freight forwarders and sea terminal operators to clarify billing practices.
“The general idea is to try to clean up pricing in the United States,” Wu said. “We almost want to develop a jurisprudence on price or junk fees that agencies understand and have a playbook to work with.”