President Sides with Wall Street; Ignores Urging of Veterans, Servicemembers,
Seniors and Consumers to Uphold Important Consumer Protections
Today, President Trump signed into law a bill that wipes out the Consumer Financial Protection Bureau’s (CFPB) forced arbitration rule protecting consumers’ Seventh Amendment right to choose between arbitration in a dispute or to take a company to court. The rule was supported by hundreds of respected organizations advocating on behalf of veterans, servicemembers, older Americans and consumers, along with civil rights groups, faith-based organizations, academics, organized labor and a coalition of conservative, liberal, libertarian and independent thought leaders.
“It’s not often that a coalition of groups representing the American public, the military and the entire political spectrum would unanimously agree on something, but then it’s not surprising that most people don’t want to have their constitutional rights stripped away for the benefit of big banks and corporations,” said Amanda Werner of Americans for Financial Reform & Public Citizen. “President Trump had a clear choice to make today between Wall Street and the rest of us. He chose Wall Street. But the rest of us will keep fighting to restore our rights so we can fight back the next time a company like Wells Fargo or Equifax tries to rip us off and get away with it.”
The effort to overturn the rule was conducted by a well-funded network of financial industry lobbyists. The campaign to uphold the rule and protect the rights of consumers was comprised of basically everyone else. Last week, 370 organizations signed a letter in support of the rule, including the NAACP, the National LGBTQ Task Force, the United Church of Christ Justice and Witness Ministries, and AFSCME. Shortly before that, 423 legal scholars sent a letter of their own. Strong public support also came from the American Legion, the Military Coalition representing 5.5 million servicemembers, 29 military groups, the AFL-CIO, and AARP.
Conservative authors and organizations including Citizen Outreach, American Future Fund, Let Freedom Ring, and Tea Party Nation backed the CFPB rule as well, as did leading consumer groups including Americans for Financial Reform, Public Citizen, National Consumer Law Center, Public Justice, and the Consumer Federation of America.
The CFPB rule restored consumers’ constitutional rights to band together to hold financial giants and Wall Street megabanks accountable for breaking the law and harming ordinary Americans. These companies bury forced arbitration clauses in the fine print of their customer agreements to deny wronged consumers the choice of pursuing justice in court – instead, subjecting them to a forced arbitration system hidden from public view and in which the arbitrator often rules in favor of the business. The rule was overturned using the Congressional Review Act (CRA), with the House passing its legislation in July and the Senate passing its bill late at night last week on a tie vote broken by Vice President Mike Pence.