Treasury opposes arbitration rules for consumers suing banks

McConnell and Mnuchin

Treasury report slams consumer bureau in latest salvo over arbitration rule

The Senate voted late Wednesday night to strike a federal rule that would have allowed consumers affected by the Equifax hack to sue the company. Lindsey Graham (R-S.C.) and John Kennedy (R-La.) had sided with the 48 Democrats in the chamber, who unanimously supported the legislation.

The arbitration rule bans companies from preventing consumers from filing or participating in class action lawsuits and takes effect in 2019.

What is the forced arbitration rule? As the CFPB said when it created the rule, it was designed to preventing companies from "sidestep [ing] the court system" by "forcing consumers to give up or go it alone". Many of them issued statements citing studies asserting that the rule would do more harm than good for consumers. The Senate could vote on S.J. Res. 47 as soon as tonight.

The banking industry and its lobbyists have been pushing hard to overturn the CFPB's new regulations.

Golmaal Again: Rohit Shetty REACTS to the films' success!
Maverick filmmaker Rohit Shetty's latest outing Golmaal Again has hit the jackpot at the Box Office. Rohit Shetty's Golmaal Again is doing wonders at the Indian as well as the overseas box office.

But Elizabeth Warren, a Democrat from MA who is a proponent of the CFPB, has said the rule would have allowed "working families to hold big banks accountable when they're cheated".

Cordray also "urged President Donald Trump to veto the resolution, but Trump is expected to sign it", writes Jack Torry for the DaytonDaily News. The Treasury claims the rule fails to account for the costs of class action litigation or prove the benefits of arbitration. "Today's vote puts consumers first rather than class-action lawyers".

Democrats, on the other hand, say that class-action lawsuits were more effective at holding big businesses accountable and offer a viable path for restitution when it comes to smaller claims. Cordray and numerous consumer groups said banks had been using mandatory arbitration clauses to stop consumers from banding together to stamp out unfair practices such as fees that are charged improperly or, in the case of Wells Fargo, fee-based products that are issued even when a consumer never sought them.

The GOP opposition to the rule was supported by the Treasury Department, which released a report on Monday saying that the CFPB's arbitration rule would "impose extraordinary cost", imposing $500 million in additional legal fees that would largely go to plaintiffs' lawyers.

Here's Why Everyone Thinks Kanye West & Taylor Swift Beef's Far From Over
One user questioned the fans' hand placements October 15, writing, "why are your hands on her stomach??? is she pregnant or what". There, she's reanimated as a robot, wearing only a second-skin bodysuit that appears to make her look totally nude.

"So who does forced arbitration help?"

The fallout from two recent financial scandals - the recent breach of sensitive consumer data at Equifax and the opening of up to 3.5 million fake accounts at Wells Fargo - complicated the GOP's antiregulation push. Sherrod Brown, D-Ohio, on the Senate floor during debate.

On the flip side, allowing the rule to stand likely would have caused an explosion of class-action lawsuits.

Most people who geta share of class-action settlements get a pittance as their reward, Treasury added: on average, $32.35 per person. Since 2007, creditors have been prohibited by the MLA from including arbitration agreements in contracts for consumer credit extended to active-duty service members and their dependents where the credit is a closed-end payday loan with a term of 91 days or less in which the amount financed does not exceed $2,000, a closed-end vehicle title loan with a term of 181 days or less, or a closed-end tax refund anticipation loan.

Mega Millions Lottery Changes to Start Soon
Mega Millions has also been redesigned, with players selecting five numbers from 1 to 70 and a Mega Ball number from 1 to 25. But those whose eyes are on the top prize can pay $3 for two entries to jackpot-only tickets, according to the lottery.

Latest News