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Senate Votes To Kill CFPB Arbitration Rule

Senate Votes To Kill CFPB Arbitration Rule

OCC Acting Comptroller Keith Noreika praised the vote as "a victory for consumers and small banks across the country" by stopping a rule "that would have likely increased the cost of credit for hardworking Americans and made it more hard for small community banks to resolve differences with their customers".

Senate Republicans have decided consumers should not have the right to file class-action lawsuits against banks even when they have a good case. GOP lawmakers used the Congressional Review Act, which lets Congress overturn new rules and bar agencies from taking them up again. Even then, however, the vote was close. Sens. Lindsay Graham of SC and John Kennedy of Louisiana - both lawyers by profession - joined Democrats in opposing the change. The issues involved aren't necessarily well-understood by the public, and President Donald Trump has made clear that he wants to cut back regulations that he blames for stifling economic growth.

For a moment, it appeared the outcome would be in doubt. Sen.

Following the vote, Noreika praised the Senate's decision as a "victory for consumers and small banks across the country". Vice President Mike Pence had to cast the deciding vote to break a 50-50 tie in the Senate.

After the vote, Leahy said in a statement that striking down the rule deals a blow to Americans' access to the judiciary system.

"It was despicable what happened last night...an example of middle of the night shenanigans", said Brown.

On Tuesday night while many Americans were busy watching the first game of the World Series, Vice President Mike Pence trekked to Capitol Hill to hand banks one of their biggest legislative wins in years.

Financial companies and the powerful U.S. Chamber of Commerce both opposed the rule, joining Republicans who claimed that the new regulation would expose financial companies to costly class-action lawsuits that rarely deliver significant compensation for plaintiffs. Wells Fargo has paid out several hundred million dollars in civil and regulatory penalties, including a $140 million settlement in a class-action lawsuit. Arbitration agreements have been effective before in preventing class action lawsuits. John Cornyn, R-Texas, in floor debate on Tuesday. "I urge my colleagues to repeal the CFPB arbitration rules that imposes obvious costs and invisible benefits". Compare that to the $360,000 that Arbitrators awarded to 78 consumers in two years. That followed another agency, the Office of the Comptroller of the Currency, which also claimed that the rule would raise legal costs for banks. They said Congress intended for this alternative method of resolving disputes when it passed a Federal Arbitration Act of 1925.

US Ambassador to New Zealand to be More 'Culturally Aware'
US Ambassador Scott Brown with his wife Gail Huff-Brown speaking with Stuff at the US Embassy in Wellington on Wednesday. And apparently somebody took offence to that. "Sadly, it's politics.

"Most voters don't care, this is one night and nobody was watching", said Charles Gabriel, an analyst at Capital Alpha Partners in Washington. "That's exactly what the banks are counting on". Meanwhile, Sen. Elizabeth Warren of Massachusetts, Senate Minority Leader Chuck Schumer of NY and other Democrats had repeatedly argued that repealing the regulation would allow high-profile scandals at Equifax Inc. and Wells Fargo & Co.to go unpunished. They said arbitration makes it possible for a consumer to seek redress without making either party go through the the cost of litigation.

"Forced arbitration hurts the 3.5 million people who had bank accounts fraudulently opened by Wells Fargo", said Sen.

ARNOLD: Democratic Senator Sherrod Brown was not happy.

Equifax relented and said it dropped the arbitration requirement after national outrage. Many Republicans have sharply criticized it as lacking accountability.

"If there's no forced arbitration clause in your contract, you have a choice".

Politicians also slammed Wells Fargo & Co. for wanting to settle customer complaints over abusive sales practices through arbitration and Chief Executive Tim Sloan told Senators this month that the company would not stop them suing.

"There is no evidence that people will get more money..."


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