Another Wall Street Win Over Regular Americans –
… Leahy Has Spotlighted Use Of Forced Arbitration By Such Firms As Wells Fargo And Equifax
[The Senate Tuesday night narrowly passed a measure to kill a new consumer protection rule by the Consumer Financial Protection Bureau (CFPB) that would have restored consumers’ rights to band together in class action lawsuits for remedies – and transparency – when they are harmed by financial services firms, such as Wells Fargo and Equifax. When applying for commonly used products such as credit cards and other financial services, consumers today are typically forced to sign small-print forced mandatory arbitration clauses, which preclude such lawsuits and compel consumers instead to enter into mandatory arbitration, behind closed doors. Leahy has been a leader in pushing back against this effort by President Trump and congressional Republicans to use the Congressional Review Act (CRA) to kill the new consumer protection rule. Leahy also is the chief sponsor of the Restoring Statutory Rights Act, which would ensure that when Congress or the states have created rights and remedies for injured victims, they are able to enforce those rights and remedies in court. Leahy’s bill, which is pending before the Judiciary Committee, also makes clear that when states take action to address forced arbitration – as Vermont and other states have tried to do – federal law should not interfere. The effort to kill the CFPB rule was strongly supported by powerful Wall Street interests. The Senate vote Tuesday night was 51 to 50, with Vice President Pence casting the tie-breaking vote. The House already has passed the same CRA measure, which now goes to the President’s desk for signing. Leahy voted against killing the consumer protection rule and entered a statement about the vote (below) into the Congressional Record.]
Leahy Statement On The Congressional Resolution Of Disapproval Relating To The CFPB’s Arbitration Rule
Something truly outrageous is happening today on the floor of the Senate. The resolution we will consider today signals to the American people, in no uncertain terms, that they do not deserve the right to seek justice when big banks or other financial service providers rip them off, leave their personal information exposed to hackers, or engage in discrimination. The resolution of disapproval before us today will strip Americans of their rights in court and will ensure that corporate wrongdoing can remain shrouded in secrecy — all to protect powerful companies like Wells Fargo and Equifax.
Access to our court system is a fundamental principle in American society. It ensures that all those who wrong others, no matter how powerful, are equal in the eyes of the law and can be held accountable. That may no longer be the case. Access to our courts is under assault by companies that slip forced arbitration clauses into the fine print of agreements for basic services like checking accounts and credit cards. For some of these companies, like Equifax, consumers are not even their customers. They sell consumers’ financial information to other companies. They have little incentive to protect consumers or even treat them fairly. That is how Equifax can actually make significant profits after it carelessly allowed the personal information of half of the adult population in the United States to be compromised. This is wrong.
The Consumer Financial Protection Bureau (CFPB) rightly put some commonsense limitations on the abuse of forced arbitration clauses. The rule provides that financial services companies cannot force consumers to sign away their right to join a class action lawsuit. The rule also requires more transparency when arbitration is used to ensure that wrongdoing cannot be hidden by powerful companies to keep consumers in the dark. Protecting consumers in this way should not be controversial.
With the blunt instrument of a resolution of disapproval, the Majority is seeking to strike the CFPB’s rule and prevent it from ever implementing a similar rule in the future. This action, through a simple majority vote, would slam the courthouse door shut on every American who is ever ripped off by a company like Wells Fargo or has their sensitive personal information carelessly left unprotected by a company like Equifax. If we go down the path of striking this rule, consumers will only be left with the same empty, meaningless apologies we always hear from these companies when they are finally caught red-handed.
I hope the American people are following this vote today. If they want to know whether their senator stands with them, or stands with corporate abusers, they will certainly find out. Whose side will the Senate be on when the roll call is taken on this key vote” The American people, and their rights as citizens and as consumers” Or the powerful corporate interests who are pushing to repeal this protective rule” We shall soon see.
This should not be a partisan issue. We all represent the American people. It is time we act like it. The Vermonters I represent are watching. They now what is at stake by repealing this rule. I urge every Senator who shared my outrage at Wells Fargo and Equifax to take a stand and reject this shameful resolution.
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