As I predicted, the Trump presidency and Republican Congress aren’t going to be good for consumers.
The Senate leadership is pushing a vote Tuesday on whether to repeal the Consumer Financial Protection Bureau’s arbitration rule.
Forced arbitration clauses that are buried in the fine print of take-it-or-leave-it contracts may be the single most important tool used by predatory banks, payday lenders, credit card companies, and other financial institutions to cheat and defraud their customers, Public Citizen, a citizen advocacy group, said. These clauses push customer disputes into secretive arbitration proceedings that are rigged to favor financial companies and conceal wrongdoing from regulatory authorities.
In response to forced arbitration, the bureau finalized a rule that restores consumers’ right to join together in class actions to challenge wrongdoing in court. But now, the Senate leadership is pushing to strike down the rule using a Congressional Review Act resolution of disapproval. The Senate could vote on S.J. Res. 47 Tuesday.
“The vote on this rule is a litmus test of whose side you’re on: Main Street consumers or big banks,” said Amanda Werner, arbitration campaign manager for Public Citizen and Americans for Financial Reform. “Big banks, the financial industry, and their allies in Congress are trying to overturn the arbitration rule because it will deprive them of a means to rip off consumers with impunity. Even after condemning Wells Fargo and Equifax, these same politicians are about to cast a vote that would help them cheat and scam customers and get away with it scot free.”
Earlier this month Werner dressed up as the Monopoly Man and sat behind Equifax CEO Richard Smith at a Senate Banking Committee hearing on Oct. 4. The stunt was widely viewed on the Internet and received press coverage as the Monopoly Man was seen adjusting a monocle, wiping his brow with an oversized hundred-dollar bill, and chasing down Smith with a bag of money after the hearing. Werner is leading a coalition of nearly 80 public interest groups in a campaign to defend the arbitration rule.
“Forced arbitration is a rigged game, one that the bank nearly always wins,” she said. “It gives companies like Wells Fargo and Equifax a monopoly over our system of justice by blocking consumers’ access to the courts.”
It’s no secret why lawmakers want to hand financial companies a Get Out of Jail Free card, Werner said. The financial industry has given more than $100 million in campaign contributions to lawmakers opposed to the rule.
“These contributions help explain why lawmakers are willing to aid and abet big banks in ripping off their own constituents despite overwhelming bipartisan support for the rule,” she said.
