Credit Union Trades Blast Biden Description of ‘Junk Fees’

Credit union trade groups CUNA and NAFCU have pushed back against President Biden's remarks on 'junk fees' during his State of the Union. Learn why.

David Baumann


Feb 8



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David Baumann

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David Baumann

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CUNA, NAFCU respond to State of the Union address, share concerns over access to short-term credit.

Credit union trade group officials are bristling at President Biden’s characterization of “junk fees” during his State of the Union address Tuesday night.

“My administration is also taking on “junk” fees, those hidden surcharges too many businesses use to make you pay more,” Biden said. “We’ve reduced exorbitant bank overdraft fees, saving consumers more than $1 billion a year. We’re cutting credit card late fees by 75%, from $30 to $8.”

He added, “Junk fees may not matter to the very wealthy, but they matter to most folks in homes like the one I grew up in. They add up to hundreds of dollars a month.”

Later, he said, “I know how unfair it feels when a company overcharges you and gets away with it. Not anymore.”


To attempt to place the issue in context, the CFPB has issued a proposed rule that would reduce credit card late fees to $8. And while there has been widespread discussion of the CFPB issuing a final rule reducing overdraft fees, one has yet to be adopted.

Pushback From Credit Union Groups

Still, credit union trade groups quickly criticized Biden’s characterization.

“The president’s use of the term ‘junk fee’ is overly broad and ignores the needs of low-income and middle-income consumers who depend on these services to resolve short-term financial difficulties,” CUNA President/CEO Jim Nussle said. “It does not consider the costs involved in providing needed financial services that consumers depend on.”

He added that consumers must opt-in to have the option of overdraft protection, without which people are more likely to turn to predatory lenders, “the same people the administration seeks to help.”

NAFCU President/CEO B. Dan Berger said Biden and the CFPB are not painting the entire picture when it comes to credit card late fees.

“President Biden and the CFPB are not giving Americans the full picture of what the credit card late fees proposal will actually mean for their pocketbooks,” he said. “Consumers rely on safe, reliable short-term credit to afford daily life.”

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