The House passes HR 6543 and enters the ring to regulate Junk Fees for hotels and short-term lodging

On June 11, 2024, the United States House of Representatives passed HR 6543, the so-called “No Hidden FEES Act of 2023” which introduces federal regulations aimed at enhancing transparency and fairness in the advertising of hotel room and short-term lodging prices. A critical component of this Act is its preemption clause, found in Section 4(a), which establishes a national standard prohibiting states from enforcing any laws that conflict with the federal mandate. This provision has significant implications for state regulations, such as California’s SB 478, which also aims to protect consumers from hidden fees in various transactions. The scope and application of this preemption clause are essential for assessing how state laws will be affected and ensuring compliance with the new federal standards.

Below, we compare the No Hidden FEES Act of 2023 to the Proposed FTC Rule on Junk Fees and California’s SB 478:

Preemption of SB 478 will be an issue if the No Hidden FEES Act of 2023 is enacted. As noted above, the “No Hidden FEES Act of 2023” would establish a national standard for advertising hotel room and short-term lodging prices. This national standard could preempt California’s SB 478 to the extent that SB 478 conflicts with federal law. Specifically, Section 4(a) of the No Hidden FEES Act of 2023 prohibits states from maintaining or enforcing laws that contradict the Act’s provisions on price advertising for short-term lodging. However, SB 478 might still apply to other types of transactions not covered by the federal Act, such as internet services and event tickets, unless explicitly preempted by other federal regulations.