Durbin Urges Secretary Buttigieg to Conduct Oversight Over Airline Rewards Programs in Appropriations Subcommittee Hearing
In today’s Transportation, Housing and Urban Development, and Related Agencies Appropriations Subcommittee hearing, Durbin urged Secretary Buttigieg to ensure airlines are held accountable for any predatory practices related to rewards or loyalty programs
WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), a member of the U.S. Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, today participated in a Subcommittee hearing entitled “A Review of the President’s Fiscal Year 2025 Budget Request for the U.S. Department of Transportation.” During the hearing, Durbin questioned the witness, U.S. Secretary of Transportation Pete Buttigieg, about how the federal government can conduct oversight on airlines’ frequent flyer and loyalty programs.
“After you are in your seat and have your belt fastened and you are underway, there is an announcement that comes around in most airplanes, not about critical safety issues, but incredible credit card and frequent flyer opportunities… Then the flight attendants walk up and down the aisles and pass out these cards for applications for their branded credit cards… It is a heavy and hard sell. You have to ask yourself why? Why are they spending so much time doing it?” Durbin said. “Because major airlines make more money off of their branded credit cards in your pocket than they do off their aviation operations. It turns out those big airlines are actually credit card companies that happen to own a few airplanes.”
“The question I have for you is, who polices the ranks when it comes to these frequent flyer programs?” Durbin asked Secretary Buttigieg.
Secretary Buttigieg acknowledged that while the U.S. Department of Transportation (DOT) is not a banking regulator, it does have responsibility for protecting airline passengers. DOT has launched a review of airline reward programs in an effort to determine if airlines are using unfair or deceptive practices in running these programs. Secretary Buttigieg also noted that DOT is collaborating with the Consumer Financial Protection Bureau (CFPB) as the agency has further jurisdiction over financial programs and credit cards. DOT and CFPB plan to hold a joint hearing with industry representatives, labor leaders, and consumer advocates to discuss issues that consumers are experiencing with airlines’ credit card reward programs later this month.
“I understand you have a jurisdiction that isn’t exactly consumer protection, but this is really an entity that has become so important to so many families across America. We have troubling reports that airlines are devaluing points, making it harder for consumers to achieve promised rewards, and at certain times, the cost of purchasing points from airlines websites may be three times the value of the points at redemption. The list goes on and on. There is no policing the ranks of these airline credit card companies when it comes to this benefit,”Durbin replied.
Following the introduction of his bipartisan Credit Card Competition Act, Durbin has kept a watchful eye on airlines’ reward programs. In an effort to protect consumers against unfair and deceptive practices used by airlines in these programs, Durbin has sent letters to DOT and CFPB calling for more oversight and met with CFPB Director Rohit Chopra on the issue.
Durbin also applauded Secretary Buttigieg for discussing rail service in Chicago before asking him about what additional federal investments are available to support these rail projects.
“I’m glad you led off your [opening] statement on rail service with Chicago, Illinois. You can understand my interest in that. I hope that we can find a way to finally make an investment that will dramatically change the performance of railroads across the United States, [which are] dependent on efficiency in Chicago. We've had some horror stories in the past. We want to get those behind us. What is your thinking on that?” Durbin asked.
Secretary Buttigieg affirmed that Chicago is a suitable candidate for additional investments that would yield major improvements for rail service. He noted that his team is welcome to further discretionary grant applications regarding rail projects across the state of Illinois.
Video of Durbin’s questions in Committee is available here.
Audio of Durbin’s questions in Committee is available here.
Footage of Durbin’s question in Committee is available here for TV stations.
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