Consumer Affairs reports the following on the CFPB’s Anti-Arbitration Rule. We advise you to read the piece, and if you need any clarification on any of the surrounding issues, please do not hesitate to contact us on our website, or at ConsiderTheConsumer@gmail.com:
Congress has begun the process of unwinding a consumer’s right to a day in court, as the House voted 231-190 along party lines Tuesday to block a rule recently implemented by the Consumer Financial Protection Bureau.
Only one Republican, Walter Jones of North Carolina, crossed party lines to vote against the measure, which faces an uncertain fate in the Senate.
Supporters of the rule, including consumer groups, say repealing it would hurt consumers.
“The arbitration rule makes it harder for companies to bury language deep in contracts that strips customers of their rights. It helps everyone, but is especially important for communities of color and students,” said Vanita Gupta, CEO of The Leadership Conference on Civil and Human Rights. “But some in Congress are in a desperate rush to undo this arbitration rule, and to force people into secretive, rigged proceedings when they have been ripped off by banks, credit card companies, student loan lenders, and other financial institutions.
The Trump Administration has said it “strongly supports” the Republican bill, saying that the CFPB’s rule would harm consumers and “benefit trial lawyers by increasing frivolous class-action lawsuits.”
But Lisa Gilbert, Vice President of Legislative Affairs at Public Citizen, said the House vote amounted to “a savage attack on American consumers.”
“By voting to overturn the CFPB’s arbitration rule, Republicans in Congress are siding with predatory banks, payday lenders, credit card companies, and the financial industry against Main Street Americans, and are choosing to be on the wrong side of history,” Gilbert said.
“Unfair clauses hidden in the fine print of consumer contracts may be the single most pernicious tactic that the financial industry uses to escape accountability for cheating, conning, fleecing, defrauding and plundering consumers. Big banks, the financial industry and their allies in Congress are trying to overturn the CFPB’s rule because it will deprive them of a means to rip off consumers,” Gilbert added.
Business groups contend that forced arbitration is better for everyone.
“When it comes to resolving consumer disputes over credit cards, checking accounts, or peer-to-peer loans, consumers get more money, more quickly from arbitration than from class action lawsuits,” said John Berlau of the Competitive Enterprise Institute.