WASHINGTON (NEXSTAR) — Rents are rising faster than salaries across the country, and some members of Congress argue junk fees are partly to blame.
A Senate committee analyzed Thursday what lawmakers can do to help eliminate these often hidden costs.
“Junk fees, it’s just not fair,” said Adam Rust with Consumer Federation of America. “It’s so hard to determine how much you’re really going to pay. That doesn’t make any sense at all for our economy.”
Rust told the committee one-time or monthly junk fees, like applications or pet rent, make it impossible for renters to compare prices.
“It puts well-intentioned landlords who are being fair at a disadvantage with landlords that are playing these games,” he said.
Rust said junk fees trap renters in unaffordable leases, which cause additional financial struggles, like late and overdraft fees on their credit cards.
“‘Junk fees’ is a made-up word,” said Karen Madry, the president and CEO of Afena Federal Credit Union.
Madry argued those credit card fees are regulated.
“We waive fees whenever possible if a member comes in and asks,” she said.
Madry stressed she serves a low-income community in Indiana and worries eliminating those fees would force her to reduce that kind of personalized service.
“Increase our interest rates, when possible, eliminate things like free checking accounts,” she said.
The White House has made it a top issue to try to ban junk fees across housing, banking and other industries.
“They hide the price. That’s the whole point,” said U.S. Sen. Sherrod Brown, (D-Ohio.). “Junk fees make a mockery of free and fair markets.”
But U.S. Sen. Tim Scott, (R-S.C.), said fees are not the issue.
“Inflation is raging,” Scott said. “If my friends on the other side of the aisle were truly interested in helping the American family, this hearing would be about finding solutions to tame inflation.”
