Why Sen. Collins Voted to Give Companies like Wells Fargo and Equifax a Free Pass on Bad Behavior
Maine Senator Had 3.5 Million Reasons to Gut CFPB’s Rule on Forced Arbitration and None Were a Benefit to Consumers
WASHINGTON, D.C. – Following yesterday’s late-night vote in the Senate to repeal the Consumer Financial Protection Bureau’s (CFPB) rule protecting consumers from forced arbitration, many are left wondering why Sen. Susan Collins (R-ME) sided with big banks and bad actors like Wells Fargo and Equifax over Maine consumers.
The deciding vote (the Senate voted 50-50 and Vice President Mike Pence broke the tie), Collins was publicly undecided on the issue for weeks, refusing to divulge how she planned to vote. Last night she made no speech during debate on the repeal legislation. Today she has yet post a statement on her official website or social media accounts.
It turns out, Sen. Collins had 3.5 million reasons to strip Mainers of their right to take big banks and other financial predators to court when they are screwed over.
Collins Has Taken $3.5 Million from the Financial Industry and Thousands from Scandal-Ridden Equifax and Wells Fargo — Each Company Opposed the CFPB’s Rule and Used Forced Arbitration When Massive Data Breaches and Systemic Fraud Were Uncovered.
- Over the Course of Her Career, Collins Has Taken $3,529,831 from the Financial Sector. [Center for Responsive Politics, accessed 09/11/17]
- Collins has also received $2,000 in PAC contributions from Equifax PAC over the course of her career. [Equifax PAC Campaign Contributions, Federal Elections Commission, accessed 09/08/17]
- Collins Has Received $8,750 in Campaign Contributions from Wells Fargo Employees and the Company’s Corporate PAC. She received $750 in campaign contributions from Wells Fargo employees and $8,000 in PAC contributions from Wells Fargo and Company Employee PAC over the course of her career. [Political Moneyline Search for Wells Fargo Employee Contributions, accessed 09/12/17 and Wells Fargo Employee PAC Campaign Contributions, Federal Elections Commission, accessed 09/12/17]
How Forced Arbitration Impacts Maine:
- Servicemembers and Veterans: Banks and lenders use forced arbitration clauses in loans issued to Maine’s 4,650 active-duty servicemembers and reservists and to Maine’s veterans. Forced arbitration blocks servicemembers’ access to the courts for violations of the Servicemembers Civil Relief Act and other misconduct, including illegal repossessions of active- duty servicemembers’ vehicles. Wells Fargo also has arbitration clauses in many of the auto loan contracts that included illegal fees for unneeded auto insurance, including those of active duty servicemembers.
- Bank Account Holders: Wells Fargo opened up to 3.5 million fake accounts– including 217 in Maine – without customers’ consent. Wells Fargo has tried since 2013 to use forced arbitration to block lawsuits, including a class action that would help Mainers. Wells Fargo has also repeatedly tried to use forced arbitration to avoid justice for people in 49 states – including Maine – who were charged excess overdraft fees when their accounts were not overdrawn.
- Consumers with Inaccurate Credit Reports: Hundreds of Mainers have filed complaints with the CFPB about problems with credit reporting agencies and errors in credit reports, which can increase the cost of a loan or result in a denial of credit. Mainers falsely matched with a terrorist watch list will get about $7,337 in relief from a class action against Transunion. But Transunion and other credit bureaus have tried to use forced arbitration to block class actions.
- Payday Loan Borrowers: Over 99% of storefront payday lenders use forced arbitration clauses in their loan agreements in some states. Annually, Mainers pay more than $573,000 in fees associated with payday loans that put Mainers in a cycle of debt. Payday lenders have engaged in abusive lending and illegal debt collection practices.
- Prepaid Card Users: Nearly one in five Mainers are unbanked or underbanked, and many rural and low-income Mainers rely on prepaid cardsto manage their money. RushCard holders, including 477 Mainers, and servicemembers serving overseas, were among those harmed when cards were frozen and people could not access their money for weeks. A class action will give class members up to $500 for losses and fees they suffered. The case could have been blocked by a forced arbitration clause, found in 92% of prepaid card contracts.
- Families Subject to Illegal and Abusive Debt Collection Practices: Debtcollectors are #1 among Mainers’ and servicemembers’ complaints to the CFPB. Out-of-state debt buyers, who buy consumers’ debt for pennies on the dollar, engage in abusive—and often illegal—financial practices. Debt buyers frequently use arbitration clauses to avoid lawsuits – even when they can’t provide copies of the agreements.
- College Students: Mainers are among those harmed by predatory for-profit colleges, such as Corinthian Colleges, that for years have used forced arbitration clauses to block class actions over their fraudulent conduct. Maine students also average $29,644 in public and private student loan debtand may be impacted by abuses by Navient (formerly Sallie Mae), the largest servicer of private student loans. Navient, which has forced borrowers into arbitration, allegedly “failed to provide the most basic functions of adequate student loan servicing at every stage of repayment.” Mainers may also fall prey to rampant abuses by sketchy student loan debt relief companies, which also use forced arbitration clauses to deny students their day in court. Mainers may also fall prey to rampant abuses by sketchy student loan debt relief companies, which also use forced arbitration clauses to deny students their day in court.
To speak with Karl Frisch about the CFPB’s arbitration rule, please contact Annette McDermott at 202-697-4804 or annette@alliedprogress.org.
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