Mike Pence cast the deciding vote Tuesday night to allow big banks to screw consumers, as the Senate repealed a Consumer Financial Protection Bureau rule making it easier for people to sue banks and credit card companies. The rule prevented financial institutions from forcing consumers into binding arbitration and blocking them from going to court. Instead, it opened up class-action suits as a way for people to join together and fight abuses.
Republicans didn’t like that so much, wailing about the enormous costs that would supposedly be racked up by frivolous lawsuits. You know, things like this:
For years, Wells Fargo used arbitration clauses to block lawsuits from customers who alleged that unauthorized accounts had been opened in their names. Ultimately, the bank estimated that as many as 3.5 million such accounts were opened.
The bank agreed to settle some class-actions suits, but not until the CFPB, the Office of the Comptroller of the Currency and the Los Angeles city attorney’s office fined the bank over those practices last year. Even in cases that the bank settled, it had argued that the plaintiffs could not sue because of arbitration clauses.
You may remember that Equifax was forced by public outcry to remove an arbitration clause from its agreement to provide free credit monitoring to people whose personal information it allowed to be stolen. That’s the kind of thing this CFPB rule was designed to address that so outraged Republicans.
The consumer bureau had determined that the effect on the entire financial system would be less than $1 billion a year. Cordray has noted that U.S. banks earned a record $171 billion in profits in 2016.
That’s what Republicans say is just too much money wasted on frivolous lawsuits against things like unauthorized bank accounts being opened in your name or your Social Security number being stolen.
Two Republicans—South Carolina’s Lindsey Graham and Louisiana’s John Kennedy—voted no, forcing Republicans to bring in Pence. But note who voted the party line despite their criticisms of Donald Trump earlier in the day. That’s right, both Bob Corker and Jeff Flake.
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