After nine months of struggling to deliver on their legislative priorities, Senate Republicans found unity this week when they overturned a rule that would have made it easier for Americans to sue banks and credit card companies. The measure passed with Vice President Mike Pence breaking a 50-to-50 tie.
Republican Senators Lindsey Graham and John Kennedy of Louisiana broke with their party to vote against the measure, which now heads to President Trump, who is expected to sign it. The rule, developed by the Consumer Financial Protection Bureau, would have allowed people to file class action lawsuits that could have cost the banks billions of dollars.
Amanda Werner talking:
unfortunately, on Tuesday night, Republicans voted to take away our right to sue banks like Wells Fargo, companies like Equifax, when they break the law. And they did this by repealing a new CFPB rule that restored our right to join together in class action lawsuits.
it ended the use of what we call “ripoff clauses,” essentially, these fine-print clauses that they stick in, you know, take-it-or-leave-it contracts that say when they break the law and we have a dispute with them, instead of going to court or joining with other consumers who are similarly harmed, we have to go into secret arbitration. And in these secret arbitration proceedings, the bank or lender gets to pick a firm to decide the case, a firm that they work with routinely and has, you know, kind of this repeat-player bias in their favor. And we are actually blocked from presenting evidence, from appealing a bad decision. There aren’t the same kind of legal protections we get. And, in fact, a recent Economic Policy Institute report found that the average consumer is forced to pay their bank or lender almost $8,000 in arbitration.
I think that’s what’s really appalling here, is we actually had these rights restored, after, you know, decades, at this point, of banks and lenders doing this to cover up their misconduct and to stop us from being able to get our money back when they rip us off, and now they’ve taken it away again. You know, it feels like healthcare all over again, except this time it actually passed.
So I think what Senator Warren is saying there is that class action lawsuits, especially in the financial context, are essential for holding these banks accountable. As we saw with Wells Fargo, they opened up 3.5 million fake accounts. If those consumers, if those millions of consumers who were harmed, can’t join together in one lawsuit, it just means that Wells Fargo doesn’t actually have to pay any of that money back and never has to pay for those crimes.
forced arbitration is a secret process with a biased decision maker that the bank picks. And essentially it means that, you know, we can’t—we have to go one by one, instead of joining together in a class action, when we’ve all been similarly harmed.
So, let’s take Equifax. With the data breach, 145 million Americans’ personal information was exposed to hackers. And under this rule, those 145 million Americans would have to file separate arbitrations. As you can imagine, there aren’t enough arbitrators in the world to handle that. So that just means that Equifax is not going to be able to be held accountable at all. They’re not going to see any lawsuits, if they don’t see a class action.
we saw an opportunity for creative protest here. This is an issue that has been hard to get people to wrap their minds around and really care about, because it is so legalistic in a lot of ways. So we decided to, you know, get creative. I dressed up as the Monopoly Man. We chose that imagery because we see this bill as a get-out-of-jail-free card for Equifax and Wells Fargo. So I got in full costume. I was in a tuxedo. I had a big red bow tie, a top hat, a monocle. And I sat right behind Richard Smith on the C-SPAN cameras. And essentially, throughout his entire two hours of testimony, I was just mugging it for the cameras, making silly faces, twirling my mustache, fussing with my monocle. And the reason for that was just to make it more entertaining for folks, make sure that folks were paying attention, because this was one of the most important hearings we’ve seen in the Senate this year.
I think one of the things that frustrated people most about the Equifax data breach was that the day after they announced it, they, you know, put up this website where they were offering supposedly free credit monitoring as a way to make up for the data breach, but buried in the terms and conditions of that website was a forced arbitration clause. And people were just completely outraged that they would have taken advantage of this tragedy, that they created, to take away our right to sue them in court. What really struck us, as consumer advocates, about that moment, though, is that this is standard procedure. It wasn’t just Equifax trying to get away with something in the wake of the data breach. This is what all banks and lenders do all the time.
one of the biggest talking points we see on this is trying to use community banks and credit unions as a shield for these big companies that will actually benefit. The fact is, community banks and credit unions, by and large, do not use these clauses at all. In fact, we have an email from one of the heads of one of these credit union associations that actually admits that their members do not use forced arbitration. So I don’t see why they would have a dog in this fight. In fact, the smaller banks and credit unions will actually benefit by finally having a level playing field where they can compete with banks like Wells Fargo, who are using these arbitration clauses not only to get away with breaking the law, but in fact pad their profits when they steal from millions of consumers.
And, you know, I think—in the Equifax data breach, it affected so many people. It was about three-quarters of the adult population. So, I was affected. My friends were affected. I don’t really know anyone who wasn’t affected, to be quite honest. And we’re not going to be able to do anything about that now that we can’t come together in a class action. And, unfortunately, we’re going need to see congressional action. But as we’ve seen, Congress can only get it together when they want to take away our rights, not when they want to do anything useful.
the fact that they would, you know, put on these tuxedos, go to fundraising events for their conservative donors the same night that they’re taking away our right to get our money back when banks rip us off is just shameful. And frankly, I think it really shows why my Monopoly Man stunt resonated with so many people. It wasn’t just drawing attention to the get-out-of-jail-free card. It was also just channeling this populist anger toward the billionaires who are trampling our rights this year and really taking our country away from us. I think it showed how out of touch all these politicians are. They’re only accountable to their corporate donors. They do not care about the people.
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Amanda Werner
arbitration campaign manager for Public Citizen and Americans for Financial Reform. Amanda has also dressed as Rich Uncle Pennybags, with a top hat and monocle.
— source democracynow.org 2017-10-27