Republicans Move to Repeal Financial Rule Opposed by Banks

Paterniano Del Favero
Luglio 26, 2017

"Americans were promised a Consumer Financial Protection Bureau, but instead they obviously got a trial lawyer enrichment bureau", House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said on the House floor. The rule would stop financial companies from trying to sidestep the courts and allow people who have been harmed by the companies to take action together.

Democratic lawmakers have backed the CFPB's rule. These mean customers have no recourse but to bring any disputes to private, arbitration panels.

Just when it seemed consumers had scored a win against predatory fine print, Republicans are moving swiftly to kill that victory. They said the point of participating in a class-action lawsuit is generally to pursue relief from small financial injuries - the kind that would not be worth the time and expense for someone to take to an arbitrator. Sen.

"It sadly reflects a Republican Party that works relentlessly to empower Wall Street and to rig the system against consumers", House Minority Leader Nancy Pelosi, D-Calif., said of the repeal effort.

House lawmakers today voted to overturn the Consumer Financial Protection Bureau's controversial final arbitration rule by a vote of 231 to 190, exercising their authority under the Congressional Review Act to reject new federal regulations within 60 legislative days of publication in the Federal Register. Since 2011, the CFPB has helped 1,429 Colorado servicemembers.

‎"Beyond the consumer protections the new rule delivers, the rule pushes banks and credit cards to be more transparent because these businesses don't want to be subject to consumer collective actions lawsuits". Meanwhile, the agency also said that banks generated more than $171 billion in profits in 2016.

The American Bankers Association urged the Senate to go along with the House. Rep. Keith Rothfus, a Pennsylvania Republican and author of the resolution, called the CFPB rule a gift to trial lawyers that would increase "frivolous class-action lawsuits".

The consumer advocacy group Public Citizen criticized the repeal vote.

Arbitration clauses are commonplace in the financial industry: About three-fourths of banks analyzed by Pew Charitable Trusts, for instance, had mandatory arbitration agreements in place.

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