President Biden will unveil the establishment of a "strike force" on Tuesday aimed at holding companies accountable for engaging in price-gouging practices. This announcement precedes the State of the Union address, where Biden is expected to present his economic agenda to both Congress and voters in anticipation of the 2024 election.
The "strike force," co-chaired by the Department of Justice and the Federal Trade Commission (FTC), is designed to streamline the Biden administration's initiatives in curbing anti-competitive and unfair practices. It focuses on reducing prices in critical sectors such as food, prescription drugs, and transportation.
National Economic Council Director Lael Brainard informed reporters that despite some price reductions on essential items, certain corporations fail to pass on the savings to consumers. Instead, they resort to adding extra fees, concealing costs, and, at times, violating the law.
While inflation, which peaked at over 9 percent in the summer of 2022, has gradually decreased to around 3 percent in recent months, Republicans argue that government spending, not corporate profiteering, is the primary driver. Brainard urged congressional Republicans to support this initiative rather than impede progress.
The strike force builds upon the groundwork laid by Biden's Competition Council, established through an executive order in July 2021 to enhance economic competition and combat "junk fees." Assistant Attorney General Jonathan Kanter sees the strike force as a significant next step in the ongoing battle against unfair and anti-competitive pricing.
Simultaneously, the Consumer Financial Protection Bureau (CFPB) is set to announce a final rule reducing the credit card late fee to $8 from $32 for major issuers with over 1 million open accounts, as revealed by CFPB Director Rohit Chopra. Critics of the late fee rule, proposed in February of the previous year, argue that it may restrict access to credit, elevate cardholder costs, and diminish incentives for timely payments.
Chopra estimates that the rule will save Americans $10 billion annually, equating to an average of $220 per person. He emphasized the need to counteract the prevalence of "junk fees" across various sectors, ensuring fairness for consumers, small businesses, and workers.
