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Consumer agency says US Senate vote is 'giant setback - Wall St won' Consumer agency says US Senate vote is 'giant setback – Wall St won'
(35 minutes later)
Consumer champions said Wall Street has secured a victory after the Senate voted to roll back rules that would have allowed badly-treated customers to band together to take legal action against banks and other financial services companies.Consumer champions said Wall Street has secured a victory after the Senate voted to roll back rules that would have allowed badly-treated customers to band together to take legal action against banks and other financial services companies.
The move signalled a retrenchment from consumer-friendly policies introduced during Barack Obama’s presidency and relied on a final vote by Donald Trump’s vice president, Mike Pence, to break the deadlock of a 50-50 tie. The move signalled a retrenchment from consumer-friendly policies introduced during Barack Obama’s presidency and relied on a final vote by Donald Trump’s vice-president, Mike Pence, to break the deadlock of a 50-50 tie.
The Consumer Financial Protection Bureau – a government agency – had wanted the rule change to be introduced. It would have allowed consumers to join together to sue their bank or credit card company to resolve financial disputes rather than sign up to the closed-door arbitration agreements included in the small print when they opened accounts.The Consumer Financial Protection Bureau – a government agency – had wanted the rule change to be introduced. It would have allowed consumers to join together to sue their bank or credit card company to resolve financial disputes rather than sign up to the closed-door arbitration agreements included in the small print when they opened accounts.
Richard Cordray, director of the CFPB, said: “Tonight’s vote is a giant setback for every consumer in this country. Wall Street won and ordinary people lost. This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company.”Richard Cordray, director of the CFPB, said: “Tonight’s vote is a giant setback for every consumer in this country. Wall Street won and ordinary people lost. This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company.”
The White House press secretary, Sarah Huckabee Sanders, said the president applauded the vote. “The rule would harm our community banks and credit unions by opening the door to frivolous lawsuits by special interest trial lawyers,” Sanders said.The White House press secretary, Sarah Huckabee Sanders, said the president applauded the vote. “The rule would harm our community banks and credit unions by opening the door to frivolous lawsuits by special interest trial lawyers,” Sanders said.
The CFPB rule was to have been introduced next Spring but would not have been helped customers affected by the Equifax data leak or those affected by the sales practices scandal at Wells Fargo, where staff created as many as 1.5m deposit accounts and 565,000 credit card accounts without customers’ consent. The CFPB rule was to be introduced next Spring but would not have helped customers affected by the Equifax data leak or the sales practices scandal at Wells Fargo, where staff created as many as 1.5m deposit accounts and 565,000 credit card accounts without customers’ consent.
Even so, Democratic lawmakers said the CFPB’s rule would have given consumers more leverage to stop companies from financial wrongdoing. “So who does forced arbitration help? Wall Street banks and other huge corporations that never pay the price for cheating working people,” said Democratic Senator Sherrod Brown.Even so, Democratic lawmakers said the CFPB’s rule would have given consumers more leverage to stop companies from financial wrongdoing. “So who does forced arbitration help? Wall Street banks and other huge corporations that never pay the price for cheating working people,” said Democratic Senator Sherrod Brown.
“Once again, we’re helping the powerful against the powerless,” said Senate minority leader Chuck Schumer, as the Senate neared the vote, sensing the Democrats would lose.“Once again, we’re helping the powerful against the powerless,” said Senate minority leader Chuck Schumer, as the Senate neared the vote, sensing the Democrats would lose.
Opponents of the rule change said that the average consumer got less from a court case than from arbitration.Opponents of the rule change said that the average consumer got less from a court case than from arbitration.
“The effort to try to characterise this as some devious system that has been created to try to stop consumers from having access to fairness is simply false,” said Senator Mike Crapo, the Republican chairman of the Senate banking, housing and urban affairs committee. “We have a very fair system that has been working for over 100 years in this country.”“The effort to try to characterise this as some devious system that has been created to try to stop consumers from having access to fairness is simply false,” said Senator Mike Crapo, the Republican chairman of the Senate banking, housing and urban affairs committee. “We have a very fair system that has been working for over 100 years in this country.”
Crapo said the average pay-out for consumers in class-action lawsuits against financial companies was just $32, but lawyers stood to make millions.Crapo said the average pay-out for consumers in class-action lawsuits against financial companies was just $32, but lawyers stood to make millions.