WASHINGTON, D.C. – Today, former Equifax CEO Richard Smith testified in front of the Senate Banking Committee, his second of four hearings on Capitol Hill regarding last month’s data breach that endangered the financial security of over 145.5 million consumers.
Sen. John Kennedy (R-LA) grilled Smith on Equifax’s botched response to the data breach, which included forcing non-Equifax consumers into arbitration and charging them additional fees to protect their data. Said Kennedy, “I don’t pay extra in a restaurant to prevent the waiter from spitting in my food.” Watch the video of Kennedy’s exchange here.
But will Kennedy back up his words with pro-consumer action? The Senator has the power to stand up for every American today by opposing S.J. Res. 47, which repeals the Consumer Financial Protection Bureau’s (CFPB) new rule protecting consumers that have been taken advantage of by big banks and other financial interests from being forced into secret arbitration tribunals where industry calls the shots and consumers hardly stand a chance.
Senator Kennedy has said he is undecided on the bill and could be the deciding vote. If the legislation passes, it would be a giant gift to companies like Equifax. As Smith confessed in today’s hearing, the company will continue to use forced arbitration as long as it is legal.
“Senator Kennedy is absolutely right. If a company like Equifax is entrusted with the personal data of hundreds of millions of Americans, they should be expected to protect it. And when they break that trust, consumers should have a right to hold them accountable,” said Karl Frisch, executive director of Allied Progress.
“Today’s hearing demonstrates the importance of the Consumer Bureau’s arbitration rule that gives consumers a choice to hold companies like Equifax accountable for their actions. Senator Kennedy has the opportunity to back up his tough talk with bold action by coming out against efforts to repeal the CFPB’s arbitration rule,” he continued.
The 24 initial Senate co-sponsors of the repeal effort have taken more than $100 million from the financial sector over the course of their careers, according to an analysis by Public Citizen.
Clearly banks aren’t going to stop using forced arbitration on their own. The Equifax data breach is another reminder of why we need the CPFB’s arbitration rule to protect consumers against companies like Equifax.
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Allied Progress uses hard-hitting research and creative campaigns to stand up to Wall Street and powerful special interests and hold their allies in Congress and the White House accountable.