July 20, 2017
For Immediate Release:
National Association of Consumer Advocates Condemns Efforts in Congress to Repeal Agency Rule That Restores Americans’ Legal Rights
Today, Senator Mike Crapo and Reps. Blaine Luetkemeyer (R-Mo.) and Keith Rothfus (R-Pa.), announced the filing of resolutions under the Congressional Review Act that would repeal a rule on arbitration issued by the Consumer Financial Protection Bureau. The rule officially published yesterday in the Federal Register would restore consumers’ right to band together in class actions to pursue claims of wrongdoing against financial institutions.
Below is the statement of Christine Hines, Legislative Director, National Association of Consumer Advocates:
It is extremely disappointing but not all that surprising that some members of Congress would sacrifice their constituents’ legal rights to make big banks and predatory lenders happy. Wall Street lobbyists have been urging their congressional allies to seek repeal of the CFPB arbitration rule, which restores American consumers’ right to band together in court when financial institutions cheat, deceive, or defraud them.
For too long, big banks and lenders have used their fine-print contracts to take away their customers’ right to go to court against them, and forced them to resolve disputes in a secret individual arbitration process. As a result, bad actors in the marketplace have profited off of predatory and illegal conduct because there was little to hold them accountable.
Wells Fargo’s illicit acts of opening millions of accounts without customers’ consent would have come to light much earlier if consumers could go to court against the big bank. By supporting repeal of the arbitration rule, some members of Congress are choosing Wells Fargo’s ability to cheat customers over the constitutional rights of their constituents.
Active-duty servicemembers like Sergeant Charles Beard, who had his car repossessed while on duty, have found that they cannot enforce the protections granted to them by Congress because banks have been successful in enforcing forced arbitration clauses hidden in their contracts.
Further, the arguments that the rule limits choices and treats consumers as “helpless children,” are deceptive and disingenuous. The rule provides American consumers with more options not less. It simply restores individuals’ ability to help themselves when they are harmed.
Financial institutions should be held responsible when they break the law. But the CRA resolutions to repeal the arbitration rule would once again take away consumers’ rights and give Wall Street another free pass to act badly.