A new funding bill for the Federal Aviation Administration (FAA) is expected to pass Congress, and with it, a new suite of regulations aimed at helping passengers including refunds for certain flight delays and cancellations, an end to family seating fees, and accessibility improvements.
Airlines, for their part, have already pushed back on these regulations before they've even cleared legislative red tape. “Unnecessary regulatory rules issued without collaboration will lead to three things: confusion for consumers, reduction in choice and a decline in competition which historically drives up prices. …Very simply put, a one-size-fits-all approach is anticompetitive and anti-consumer," a statement by Airlines For America, an industry lobbying group, reads notes Skift.
Meanwhile, American Airlines CEO Robert Isom said on an analyst call that "there are several issues that remain unclear to me" regarding refunds, and he found the new regulations "quite ambiguous."
Still, consumer advocate groups like the US Travel Association say the new rules are "a big step toward vastly improving the travel experience." Moreover, they play into the Biden Administration's efforts to bolster consumer rights during his first term.
In March, the Consumer Financial Protection Bureau announced a new credit card late fee cap of $8 (down from $32). “They’re padding their profit margins and charging hardworking Americans more,” Biden said of the late fees. “It’s a lot of money.”
The new rule was temporarily halted this month, however, when Federal Judge Mark Pittman in the Northern District of Texas put an injunction on the fee cap. As the Associated Press explains, Judge Pittman had sent the US Chamber of Commerce's lawsuit up to the DC's Fifth Circuit Court of Appeals "because of the fact that few banks operate in northern Texas. However, an appeals court reversed most of Pittman’s decision and ordered him to rule on the bank’s request for an injunction." Pittman imposed the injunction, but also chastised the plaintiffs and the Fifth Circuit for the blatant forum shopping.
Bank Rules
Beyond the credit card late fee cap, the Biden Administration is looking to impose other caps on banks like overdraft fees. "For too long, some banks have charged exorbitant overdraft fees—sometimes $30 or more—that often hit the most vulnerable Americans the hardest, all while banks pad their bottom lines," Biden said in a January statement. "Today’s proposal would cut the average overdraft fee by more than half, saving the typical American family that pays these fees $150 a year. That would add up to save families $3.5 billion every year."
The Verdict
In an era of high inflation and amidst a reelection bid, the Biden Administration's regulator push is being met with the same polarization as all politics in the country. However, behind the partisanship, the new rules on corporations mark an important shift in consumer advocacy and government oversight of industry.
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