by President Biden calls for a ban on hotel resort fees – almost guarantees nothing will change
President Biden went to war over hotel resort fees and other consumer fees last fall. He ordered federal agencies to find a way to suppress or ban them.
Now, however, the CFPB is ready to limit credit card late fees to $8, but as with the rest of the junk fees the president has criticized, the agencies will do nothing more than continue to “prioritize” them. and instead calls on Congress to act. It’s like doing nothing, but it’s also potentially better for the president politically.
There are (4) categories of fees that the president calls.
- Online ticketing fees: the service charge for purchasing an event ticket, which increases the cost over the ticket’s listed price. Raising the total cost of the ticket and remunerating the ticket broker would mean more transparent pricing, not lower prices.
- Foster care costs: Suggesting that parents shouldn’t have to pay extra to sit with their kids on a flight. DOT plans to require clearer disclosure of those seat assignment costs that account for less than half a percent of DOT consumer complaints (and often when families are separated, it’s during irregular operations which will not be discussed here).
- Early Termination Fee for television, telephone and Internet service. This may limit the availability of initial discounted plans, as it leads to higher consumer turnover. When the initial value of a customer is lower, it does not make sense for a company to invest so much to acquire a customer.
- Resort and destination fees: requiring these to be included in the advertised cost of the room, and of course, since these are in no way optional, they are indeed part of the price. Failure to include them is fraudulent and misleading. Plus, resort fees make it harder to compare prices. They are usually not displayed when searching for a rate, each of the properties you might be considering appears with a price lower than the full price (and often not even by the same amount).
At a minimum, the government could start by removing the incentives that encourage resort fees in the first place (differentiated treatment of hotel room rate versus surcharge taxes at the state and local level) .
Much of the major policy development has occurred through the direct action of federal agencies in recent years. Almost a decade ago, President Obama said “I have a pen and I have a phone”. Congress largely ceased to legislate (although it continued to appropriate to some degree), and so presidents acted alone, expanding the meaning of agency statutes authorizing and sometimes violating the Supreme Court’s “major issues doctrine”.
However, President Biden has not gone the way he did with the employer vaccination mandate, CDC eviction moratorium, or student loan forgiveness. Either he couldn’t do it on his own through a regulatory body, or he chose not to. It is appeal to Congress act, which is different from acting.
- He prefers this as a middle-class voter problem rather than a policy that actually happens.
- It’s going to be very difficult to get any of the president’s desired policies passed by a Republican-controlled House with a wafer-thin majority in a Senate that often requires 60 votes to act.
- By “calling for legislation”, Biden is in effect saying “I’m signaling my support but nothing will happen, which is good because I can pit my opponents against voting middle-class consumers.”
- While sending the issue back to Congress, it opens up corporate checkbooks to provide campaign cash, with affected industries lobbying against action.
Calling on Congress to act, Biden says no action will be taken. The campaign money will be collected in Congress, and the president’s party can stand on the issue. And they don’t even touch the most fraudulent travel expenses.
(HT: @crucker)
