Alaska Senator Had 2 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. Lisa Murkowski (R-AK) would cast the final, deciding vote siding with big banks and bad actors like Wells Fargo and Equifax over Alaska consumers.
The deciding vote (the Senate voted 50-50 and Vice President Mike Pence broke the tie), Murkowski 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 – instead she quietly cast the final, deciding vote and left the Senate floor. Today she has yet post a statement on her official website or social media accounts.
It turns out, Sen. Murkowski had at least 2 million reasons to strip Alaskans of their right to take big banks and other financial predators to court when they are screwed over.
Murkowski Has Taken Nearly $2 Million from the Financial Industry and Tens of 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, Murkowski Has Taken $1,818,156 from the Financial Sector. [Center for Responsive Politics, accessed 09/12/17]
- Murkowski Has Received $1,500 in Campaign Contributions from Equifax Employees and the Company’s Corporate PAC. She received $500 in campaign contributions from employees of Equifax and $1,000 in PAC contributions from Equifax PAC over the course of her career. [Political Moneyline Search for Equifax Employee Contributions, accessed 09/12/17; Equifax PAC Campaign Contributions, Federal Elections Commission, accessed 09/12/17]
- Murkowski Has Received $23,700 in Campaign Contributions from Wells Fargo Employees and the Company’s Corporate PAC. She received $1,700 in campaign contributions from Wells Fargo employees and $22,000 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]
Murkowski Owned as Much as $250,000 in Wells Fargo Stock (and Her Parents Owned Up To $5 Million in Wells Fargo Securities)
- As Recently as August, Murkowski Owned $100,000-250,000 in Wells Fargo Stock. In 2016, Lisa Murkowski owned at least $100,000 and as much as $250,000 in Wells Fargo stock. The disclosure was filed in August 2017. [Lisa Murkowski, Personal Financial Disclosure, 08/09/17]
- Murkowski’s Parents Owned $1-5 Million in Wells Fargo Securities. “Sen. Murkowski also owns between $15,000 and $50,000 worth of shares in Wells Fargo, previously National Bank of Alaska. Her parents own between $1 million and $5 million of shares in Wells Fargo, which earned them between $50,000 and $100,000 last year.” [“Filing discloses Sen. Murkowski’s finances,” Associated Press, 04/22/03]
How Forced Arbitration Impacts Alaska:
- Servicemembers and Veterans: Banks and lenders use forced arbitration clauses in loans issued to Alaska’s 23,670 active-duty servicemembers and reservists and to Alaska’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 5,970 in Alaska – without customers’ consent. Wells Fargo has tried since 2013 to use forced arbitration to block lawsuits, including a class action that would help Alaskans. Wells Fargo has also repeatedly tried to use forced arbitration to avoid justice for people in 49 states – including Alaska – who were charged excess overdraft fees when their accounts were not overdrawn.
- Consumers with Inaccurate Credit Reports: Hundreds of Alaskans 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. Alaskans falsely matched with a terrorist watch list will get about $7,337 in relief from an 8,000-member 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, Alaskans pay nearly $6 million in fees associated with payday loans that put Alaskans in a cycle of debt. Payday lenders have engaged in abusive lending and illegal debt collection practices.
- Prepaid Card Users: Nearly one third of Alaskans are unbanked or underbanked, and many rural and low-income Alaskans rely on prepaid cards to manage their money. RushCard holders, including 377 Alaskans, 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: Debt collectors are #1 among Alaskans’ 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: Alaskans 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. Alaska students also average $26,171 in public and private student loan debt and 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.” Alaskans 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 email@example.com.
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