With help from pro-corporation/anti-consumer lawmakers that include Ohio’s Republican junior senator in Washington, Vice President Mike Pence stepped in to break a tie vote Tuesday that favored Wall Street instead of consumers, who now won’t be able to sue their banks when disputes arise.
Sherrod Brown, Ohio’s senior senator, found himself on the losing end of a vote that pitted the Trump White House and big business allies in the senate against a nation full of consumers, who can now only settle disputes they have with their bank or credit card company through arbitration, wherein a third party rules on the matter rather than going to court or joining a class-action lawsuit.
“I urge my friends to ask yourself, whose side are you on? The people we serve who get hurt by forced arbitration, or Wall Street CEOs who cash in? Choose to side with the people we serve and vote against repeal of the Consumer Bureau’s rule and give some power back to regular Americans,” Brown said in his floor speech.
The ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Brown spoke forcefully to support a Consumer Financial Protection Bureau rule that reformed the forced arbitration rule.
Brown said Congress is acting in an “outrageous” way when it comes to protecting consumers by not allowing collective action in the courts.
“Forced arbitration takes power away from ordinary people, and gives it to big banks and Wall Street companies that already have an unfair advantage,” Brown said, pointing to recent examples of outrageous actions against consumers from Equifax, which in September compromised the personal data – names, dates of birth, addresses, Social Security Numbers and Drivers’ licenses – of more than 145 million Americans.
Equifax responded by immediately trying to trick consumers into signing away their rights to access the court system in exchange for credit monitoring, Brown reminded Rob Portman and his other senate colleagues. Equifax backed down 0nly after senators and consumer groups led a public outcry.
The CFPB rule would have block mandatory arbitration clauses in some cases, potentially allowing millions of Americans to file or join a lawsuit to press their complaints.
Pence got to break the vote when Sens. Lindsey Graham of South Carolina and John Kennedy of Louisiana defected to oppose the resolution. The measure now goes to President Donald Trump for his signature, because House Republicans have already passed legislation to block the CFPB rule.
Using Wells Fargo Bank as a second punching bag, Brown recalled that back in 2013, the bank used a forced arbitration clause to silence a customer that had accused the company of opening fake accounts in his name.
“Now we know Wells Fargo opened as many as 3.5 million of those fake accounts by subjecting their employees to harsh sales goals and threatening to fire anyone who didn’t keep up,” Brown noted. “But because Wells Fargo had the power of a forced arbitration clause, they were able to sweep the 2013 lawsuit under the rug, allowing the scandal to continue for years.”
The proof of his argument came in a study by The Economic Policy Institute, which researched the outcome of people who went into arbitration with Wells Fargo, finding that, on average, they had to pay the bank almost $11,000. Brown, who’s running for a third term next year, pointed to studies that show that Wall Street and other big companies win 93 percent of the time in arbitration.
“Regular people don’t stand a chance against those numbers,” he said.
In his floor speech, Brown used an example of one of his constituents who was silenced by a big nursing home, after a spouse suffered physical and mental abuse, and then was denied their day in court. Veterans and service members are also victims of big Wall Street banks that illegally repossess cars from service members. When service members spoke up about their rights, the offending bank, Santander, used forced arbitration to keep them out of court.
“Forced arbitration hurts the 3.5 million people who had bank accounts fraudulently opened by Wells Fargo. Forced arbitration hurts the 145 million Americans who had their personal data put at risk by Equifax,” Brown said. “It hurts employees who have been hurt by their employers, it hurts students who have been cheated by for-profit colleges, it hurts our family members in nursing homes. Forced arbitration hurts the millions of Americans with student loan debt and credit cards.”
Trial lawyers, as they have been going back decades, were again identified by opponents as the bogeyman behind the CFPB rule.
“Today’s vote puts consumers first rather than class-action lawyers,” Rob Nichols, president of the American Bankers Association, said. The Credit Union National Association said the rule “was just the latest example of the one-size-fits-all rule making coming from the CFPB and thankfully Congress acted to remedy the situation.”
CFPB Director Richard Cordray, a former Ohio attorney general whose name is mentioned among Democrats who might run for Ohio’s open governors seat next year weighed-in on the issue and the vote.
“Tonight’s vote is a giant setback for every consumer in this country. Wall Street won and ordinary people lost,” Cordray said, according to The Washington Post.
Cordray noted that the legislation Rob Portman voted for “preserves a two-tiered justice system where banks can have their day in court but deny their customers the same right.”
No related stories.