In a New York Times Op-Ed, CFPB Director Richard Cordray Says Senate Can Protect “Companies or Consumers” in Fight Over Arbitration Rule
WASHINGTON, D.C. – In case you missed it, The New York Times published a piece by Consumer Financial Protection Bureau (CFPB) Director Richard Cordray in which he explains how big banks win and consumers lose if the Consumer Bureau’s new arbitration is repealed by Congress.
The rule cracks down on banks and financial institutions that take advantage of consumers by denying them a day in court and forcing them to bring any grievances to secret arbitration sessions where big banks call the shots and consumers hardly stand a chance.
In late July, Republicans in the House voted to repeal the rule through a Congressional Review Act (CRA) measure. A companion CRA bill is likely to be considered in the Senate when legislators return from recess.
An analysis by Public Citizen reveals the 24 legislators sponsoring or co-sponsoring the repeal effort in the Senate have taken more than $100 million from the financial sector over the course of their careers.
Highlights from the Cordray New York Times op-ed:
“[ … ] Before the Senate decides whether to protect companies or consumers, it’s worth correcting the record.
“First, opponents claim that plaintiffs are better served by acting individually than by joining a group lawsuit. This claim is not supported by facts or common sense. Our study contained revealing data on the results of group lawsuits and individual actions. We found that group lawsuits get more money back to more people. In five years of group lawsuits, we tallied an average of $220 million paid to 6.8 million consumers per year. Yet in the arbitration cases we studied, on average, 16 people per year recovered less than $100,000 total.”
[ …. ]
“In truth, by blocking group lawsuits, mandatory arbitration clauses eliminate a powerful means to get justice when a little harm happens to a lot of people. It is the height of hypocrisy for companies to say they’re helping consumers by closing off the very same legal option they use when they’ve been wronged.
“A cherished tenet of our justice system is that nobody should escape accountability for breaking the law. Our rule restores consumers’ legal right to stand up for themselves and have their day in court without having to wait on the government to act. That is an idea everyone should support.”
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