Economic Justice and Consumer Protection Paper

Eliminate Market Manipulation, Unfair Fees, and Price Gouging

 Consumers know the price of a product or service is determined by the laws of supply and demand. They recognize that prices go up when the cost of doing business has gone up or demand exceeds supply. When the market changes and prices go up, consumers will modify their spending choices and buy products and services within their means. This system works well when the federal government keeps inflation down, the financial system allows people to keep their money, and the prices of goods and services truly reflect costs plus a reasonable profit.

Regrettably, consumers are losing confidence in the market because they are under assault in several directions:

·       The inflation-controlling Federal Reserve System is under attack by the Executive Branch

·       Credit card interest rates are exorbitant

·       Banks are charging excessive consumer fees

·       Businesses are passing the cost of swipe fees down to customers

·       Surge pricing is driving up the cost of consumer goods and services

As Congressman, I will take the lead in protecting consumers for financial market manipulation, unfair fees, and surge pricing abuse. I have outlined my plan below for achieving these goals.

1.     Protect the Financial System from the Administration’s Market Manipulation

In a prosperous economy, businesses and consumers need a consistent flow of money to function efficiently. In the United States, a complex network of banks, credit unions and other financial institutions keeps money flowing between customer accounts, lends money to businesses and consumers, and invests in communities. The financial system works well because money is backed by the full faith and credit of the federal government. As long as the financial system remains free and independent from politics, Americans will prosper.

Regrettably, the President of the United States is meddling with free and independent financial markets. He is firing members of the Federal Reserve System independent Board of Governors He is pressuring the President of the Federal Reserve to manipulate the U.S. prime rate to advance his political agenda.[i]  By interfering in the prime rate-setting process, the President may increase inflation.

Currently, inflation stands at 2.7%. This is well above the annual inflation rate of 2% generally accepted by the Federal Reserve to control inflation, avoid a recession and maintain high employment. By lowering the prime rate, the Administration would pump more money into circulation, causing the price of goods and services to go up further and the inflation rate to jump higher. The price increase would come on top of the rise in consumer prices caused by the Trump Administration’s tariffs. Also, by dictating the prime interest rate, the Administration may push banks to increase customer fees to make up for lost revenue from interest payments. This is bad economic policy.

Let the Federal Reserve Board of Governors do their job freely and independently of politics.

2.     Lower Credit Card Interest Rates

About 175 million people in the U.S. have credit cards. High credit card interest rates are causing millions of consumers to get further into debt. As of November 2025, the average credit card interest rate in the United States was 21.39%. Five years ago, in August 2020, the average interest rate was 14.58%.[ii]

Due to increases in interest rates, about 60% of credit card users (105 million users) carry balances forward from month to month.[iii]  Also, the number of credit card holders staying in debt for extended periods of time is increasing rapidly. In 2025, about 61% of cardholders with credit card balances (sixty-four million users) were in debt for at least a year, whereas in 2024, 53% of cardholders were in debt for at least a year.[iv]

This is unfair to consumers. They use credit cards primarily to pay for emergencies and unexpected expenses for necessities, including medical bills, as well as car and home repairs. In addition, cash-strapped families are using credit cards to pay for day-to-day expenses such as groceries, childcare and utilities.[v] 

As Congressman, I will support legislation to lower interest rates on credit cards to as low as 10% and ensure that consumers continue to have access to credit cards to pay for necessities.

3.     Eliminate Unfair Bank Fees

Even without the President’s meddling, consumers are paying excessive fees to generate revenue for banks and financial institutions. A big portion of bank revenue comes from noninterest income, which is fee income collected from investment banking, administration of trust funds, bank sales of loans and leases, underwriting activities and, increasingly, customer service charges such as ATM fees, monthly maintenance fees, and safe deposit box fees.[vi]  Between 2001 and 2018, the percentage of bank income from customer service charges nearly doubled.  In 2001, service charges represented 14% of non-interest income. By 2018, service charges had grown to 25% of noninterest bank income.[vii]

The primary reason for the increase was the 2008 financial crisis. In the early years of the 21st century, banks made bad decisions that led to the collapse of the financial and housing markets. The federal government had to bail out banks with taxpayer dollars to prevent a complete financial meltdown and run on the banks. We, the consumer, are still paying the price for the banking sector’s failures in the form of higher customer service fees.[viii]

Table 1 shows a selection of fees charged by banks to consumers.

Table 1

Typical Bank Fees Charged to Consumers

I am particularly outraged by fees charged for behaving responsibly. Why should a customer be charged a “prepayment penalty” for paying off a loan early? Why should a customer be charged a “cash handling” fee for using traditional currency, including bills and coins? [ix] Why should customers be charged a “mobile deposit” fee for depositing checks via a mobile app?

This is unfair. It wasn’t meant to be in this way for the average customer, especially for electronic processing of deposits and withdrawals at ATMs. As noted by the Federal Reserve Bank,

“The 1960s saw the advent of automated teller machines (ATMs) and the establishment of local and regional ATM networks. The economics of this expanding network were based on cost reduction (primarily for labor associated with customer checking and savings accounts) rather than on revenue generation as in the credit card model. ATMs offered customers the ability to access their funds after traditional banking center hours by using their ATM cards and PINs.”[x]

We, the customers, loan our money to banks when we make deposits in our checking and savings accounts. In turn, banks pool our money and loan it to individuals and businesses with interest. This is the primary way banks worked before the financial crisis of 2008. Banks should go back to making money in the old-fashioned way: pool our deposits and make loans at sensible interest rates to businesses and families.

As Congressman, I will seek legislation to eliminate unfair bank fees, restrict bank fee expansion, and put a cap on existing bank fee amounts.

4.     Eliminate Unfair Swipe Fee Charges for Consumers and Businesses

Banks, credit card companies, and other payment processing networks charge fees that directly impact small businesses and consumers. Known as “swipe fees,” money is paid by businesses to banks and payment processors for every consumer debit or credit card transaction. In turn, many businesses pass the fee costs on to consumers in the form of surcharges or higher prices. [xi]

Why should consumers be penalized for supporting efficient business operations? With a simple swipe or touch of a debit card, credit card, or mobile phone, consumers are helping businesses to deliver thousands of goods and services quickly and effectively at the point-of-sales. Since consumers act rationally and efficiently, merchants can save time because they do not have to manage as many cash transactions. Also, merchant bank accounts are updated in real-time. However, consumers do not receive financial benefit from doing their part. Merchants pass on processing costs to consumers.

Swipe fee rates are mostly set by the dominant credit card networks - Visa, Master Card, American Express and Discover, who collectively set 70% to 90% of the total fee charged for each transaction.[xii]  This fee is non-negotiable and must be paid by the merchant. The merchant can negotiate with the payment processor on the markup fee. However, this portion of the total swipe fee is small, usually 0.1% of the transaction value.

The big financial institutions control the marketplace at the expense of consumers and businesses:

·       Swipe fee amounts depend on the type of card used, the nature of the business, the volume of transactions and the average value of transactions. Consumers do not control these factors and do not know how much the fees cost. The fees can range from 2.25% to 3.35% of the transaction for credit card transactions. The amount is less for debit card transactions.[xiii]

·       Federal law exempts debit card-issuing banks and credit unions worth $10 billion or less from existing swipe fee caps.

·       Debit card fees differ based on whether a customer is required to enter a PIN number or sign a sales receipt. The fee is hidden from customers.[xiv]

·       Credit card companies make more money from swipe fees when consumers use credit cards, reward cards, premium cards, and business cards. Also, card-issuing banks use swipe fees to fund their cash reward programs. The fee rate is higher for credit cards that offer higher cash rewards program.[xv]

·       When a business is in a credit card network, they must accept high reward cards and, therefore, pay higher fees to the network provider. In turn, those higher fees are passed on to all consumers, including consumers who pay by cash or with debit cards. That is very unfair.

·       Many businesses cannot afford to be in the electronic payment processing network and are forced to take cash only.

As Congressman, I will sponsor legislation to regulate swipe fees and bring down the cost of goods and services. The legislation will:

·       End the PIN vs. signature receipt fee-price difference and charge a uniform fee

·       Require credit card companies to charge a uniform swipe fee for reward cards

·       Cap the amount credit card companies can charge businesses for swipe fees

·       Eliminate the debit card swipe fee exemption for financial institutions valued at $10 billion or less

·       Eliminate all swipe fees for debit and credit card purchases of groceries, medical expenses, and public transit cards, such as the Chicago Transit Authority’s VENTRA card

5.     End Surge Pricing Abuses

With algorithms and artificial intelligence to guide them, companies can suddenly raise or lower prices at a moment’s notice. Known as “surge pricing,” the practice helps companies increase profit margins at the expense of customers, even when direct and indirect costs have not changed. Companies such as Uber, Door Dash, Amazon, Google, Ticketmaster, and some airlines use surge pricing. Others may follow.[xvi]

Surge pricing can raise the price of any essential consumer product. Take French fries, for example. The direct costs of producing French fries includes the price of land, labor, potato seeds, fertilizer, and pesticides, as well as processing and distributing the final product to stores and restaurants. Along the way, food companies incur indirect costs, such as maintaining company headquarters, advertising, research and development, and financial obligation costs, such as debt service and taxes. These costs are reasonable.

Consumer demand for French fries may increase due to changes in diets and menu offerings. The price will go up until more French fries are produced and supplied to grocery stores and restaurants. This process may take weeks or months to sort itself out.

Surge pricing makes a mockery of supply and demand and hurts consumers. Using a surge pricing model, a fast-food restaurant can charge more for French fries during the peak demand hours of lunch and dinner. That is not fair to consumers, who usually eat lunch and dinner at the same time each day. Consumers work, go to school, and pick up their children at regular times each day because that is the way life is organized. The price of French fries, or any food product, should not surge during normal lunch and dinner hours.

On any given business day, have the direct and indirect costs of producing French fries or any food product changed on an hour-to-hour basis? Did corporate debt payments and taxes skyrocket between the morning coffee break and lunchtime? The answer is no.

Surge pricing is about profit margins. The more a company can charge, the more profit they can make. What better way to earn money than to raise prices and charge more during peak demand hours. This is not the equilibrium price where supply meets demand. This is price gouging.

As Congressman, I will lobby for an investigation into surge pricing. The goal is to determine the extent and reach of surge pricing for essential products and set restrictions as needed.

Conclusion

The federal government can ensure that price setting is fair, equitable and transparent for consumers and the price of a product or service is determined by the laws of supply and demand, only. The plan I have outlined above will help to meet these goals.

Let economic justice roll down like waters. Let’s restore consumer confidence in the market.

 ENDNOTES

 [i] The U.S. prime rate consists of two parts: the federal funds target rate and basis points. Using data on market conditions, the economic outlook, and prices, the independent Board of Governors of the U.S. Federal Reserve Bank meets regularly to adjust the federal funds target rate. The adjusted rate is added to the rock-bottom base rate of 3.0% (300 basis points) to establish the U.S. prime rate.

[ii] McCann, Adam, Historical Credit Card Interest Rates, WalletHub, November 26, 2025, https://wallethub.com/edu/cc/historical-credit-card-interest-rates/25577

[iii]  Dhue, Stephanie, Trump floats 1-year, 10% credit card interest rate cap — what that could mean for your money, CNBC, January 12, 2026   https://www.cnbc.com/2026/01/12/trump-credit-card-interest-rate-cap.html

[iv] Kelton and Staples, op. cit.

[v] Kelton, Katie and Staples, Ana, Bankrate’s 2025 Credit Card Debt Report, Bankrate, January 12, 2026, https://www.bankrate.com/credit-cards/news/credit-card-debt-report/

[vi] Definition of noninterest income: “noninterest income is defined as income generated by banks from sources unrelated to the collection of interest payments.” Haubrich, Joseph  & Young, Tristan, Trends in the Noninterest Income of Banks, Federal Reserve Bank of Cleveland, 2019, https://www.clevelandfed.org/publications/economic-commentary/ec-201914-trends-in-the-noninterest-income-of-banks.

[vii] Haubrich, Joseph  & Young, Tristan, op. cit. https://www.clevelandfed.org/publications/economic-commentary/ec-201914-trends-in-the-noninterest-income-of-banks.

[viii] “…while banks have not increased their total noninterest income as a share of operating revenues, they have increased one type of noninterest income, namely, income from service charges. The increase in service charges is masked in the data on total noninterest income because other types of noninterest income fell during the same period, specifically, those associated with the financial and housing markets that collapsed during the financial crisis—securitization, trading, and real estate. Finally, we investigate the possible reasons for the changes we observe in banks’ use of the different types of noninterest income. While overall use of noninterest income has decreased, we find evidence that banks have increased their revenues from service charges to make up for interest income lost in the low interest rate environment.” Haubrich, Joseph  & Young, Tristan, op. cit., https://www.clevelandfed.org/publications/economic-commentary/ec-201914-trends-in-the-noninterest-income-of-banks.

[ix] Campbell, Travis, Some U.S. Banks Are Now Charging a “Cash Handling” Fee – Even at ATMS, Free Financial Advisor, July 20, 2025,  https://www.thefreefinancialadvisor.com/some-u-s-banks-are-now-charging-a-cash-handling-fee-even-at-atms/

[x] Mead, Tim et al., The Role of Interchange Fees on Debit and Credit Card Transactions in the Payments System, Federal Reserve Bank of Richmond, May 2011, https://www.richmondfed.org/publications/research/economic_brief/2011

[xi] What Are Swipe Fees and How Do They Work?, Accounting Insights, August 25, 2025, https://accountinginsights.org/what-are-swipe-fees-and-how-do-they-work/

[xii] Merchant Discount Rate Explained, Merchant Cost Consulting, February 20, 2024, https://merchantcostconsulting.com/lower-credit-card-processing-fees/merchant-discount-rate/

[xiii] Marshall, Madeline, Why Using Your Credit Card Is Getting More Expensive, Wall Street Journal, August 18, 2022, https://www.wsj.com/video/series/wsj-explains/why-using-your-credit-card-is-getting-more-expensive/07DC2C66-80E4-491A-A87F-6C653D089EDD

[xiv] PIN vs. Signature Debit Cards: Similarities, Differences, and Fees, Payment Depot, (accessed 8/26/25) https://paymentdepot.com/blog /signature-debit-cards/

[xv] Marshall, Madeline, op. cit., https://www.wsj.com/video/series/wsj-explains/why-using-your-credit-card-is-getting-more-expensive/07DC2C66-80E4-491A-A87F-6C653D089EDD

[xvi] Salvucci, Jeremy, Surge Pricing: Examples, History and How it Works, The Street, March 21, 2024. https://www.thestreet.com/personal-finance/surge-pricing-definition-examples-how-it-works-uber-lyft-doordash