VP Mike Pence cast a final vote on the Senate floor to break a 50-50 tie. On the floor was a motion to repeal a banking rule that allowed consumers to band together to sue their banks, credit card companies and other credit agencies. As you might expect, the banking industry lobbied hard to roll back these regulations because, it cost them money to defend their corruption. The rule, now going to Trump’s desk for signature, would ban most types of mandatory arbitration clauses found in agreements for checking accounts and credit cards. The Trump administration, congressional Republicans and the GOP have argued these rules harm the free market. The so-called “free market” they’re referring to is the market funded by the 99% to make the 1% even wealthier soon to be unencumbered by pesky regulations.
The rule would harm our community banks and credit unions by opening the door to frivolous lawsuits by special interest trial lawyers.
President Trump is expected to sign the new bill coming to his desk later this week. This is just another slap in the face to normal Americans who are having even more taken away from them. The bill provides the means for financial companies to shield themselves from class-action lawsuits alleging wrong-doing by their customers. Let’s use the “small” breach of customer data from Equifax. Americans didn’t have a choice to have their data at Equifax or the other two credit agencies for that matter. Americans now don’t have the legal power in their favor to bring legal action against Equifax for identity-related damages. This new bill is almost surely a response to a potential class-action lawsuit that could include 145.5 million Americans as a result of this breach.
Consumers generally don’t have the time and means to pursue claims of financial wrong-doing in arbitration. A class-action lawsuit puts consumers into a common group, as in everyone affected in the same way, heard once and ruled on once. Arbitration for small amounts of money end up with the consumer just giving up because of the time commitment outweighing the payout. Banks and financial firms know this and being able to hide behind an ocean of lawyers, there isn’t any real price to pay for taking advantage of the consumer.
Once again, we’re helping the powerful against the powerless, Senate Democratic leader Chuck Schumer said as the vote neared.
Two Republicans sided with Democrats to keep the rule, Lindsey Graham (R-SC) and John Kennedy (R-LA).