Biden caps credit card late fees at $8, probes US healthcare takeovers.
Biden admin targets high consumer costs, limiting credit card late fees, probing private equity in healthcare. Measures to save billions in junk fees.
On Tuesday, the Biden administration announced plans to restrict the fees banks can charge for late credit card payments and investigate whether the private equity industry is inflating healthcare costs for Americans. This effort is part of a broader crackdown on high consumer costs. The Justice Department and the Federal Trade Commission (FTC) will lead a "strike force" against illegal corporate behaviour that drives up prices through anti-competitive or fraudulent practices.
Additionally, the FTC, Justice Department, and Department of Health and Human Services (HHS) will examine the "impact of corporate greed in health care," focusing on private equity transactions. They will investigate how such deals might lead to increased consolidation, and profits for firms, and threaten patient health, worker safety, care quality, and affordable healthcare.
Over the past decade, private equity buyers have invested billions in purchasing healthcare-related companies in the U.S., often leading to increased costs with minimal regulatory oversight, according to research groups like the National Institute for Health Care Management. The agencies have issued a Request for Information (RFI) seeking public comment on healthcare deals involving health systems, private equity, and other asset managers.
The administration will also finalize a rule that reduces credit card fees from an average of $31 to $8, as well as another rule that gives ranchers and farmers more power when negotiating contracts with meat packers. President Biden will announce these measures at the White House on Tuesday, coinciding with a meeting of his Competition Council, which focuses on anti-competitive practices in various sectors.
Despite strong job growth and spending, U.S. inflation remains a concern for American voters, particularly regarding the cost of goods and housing. President Biden, running for reelection in November, has frequently criticized "greedy" CEOs and previously targeted airline junk fees and insulin pricing. His administration's efforts are estimated to eliminate over $20 billion in junk fees annually.
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra stated that the limit on credit card late fees will save American families $10 billion annually, benefiting around 45 million cardholders charged late fees each year. He noted that credit card issuers have exploited a loophole since 2010 to avoid federal restrictions on unreasonable fees by increasing them annually with automatic inflation adjustments.
The Department of Agriculture's rule, proposed last September, prohibits retaliation against producers for activities protected under the Packers and Stockyards Act, which aims to ensure competition in livestock, meat, and poultry markets. Agriculture Secretary Tom Vilsack described this final rule as providing clearer and more effective standards for governing these activities in the modern marketplace.
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