Congress Votes in Middle of the Night to Gut Consumer Protection

Republicans in the U.S. Senate, with the help of a tie-breaking vote from Vice President Mike Pence, held a late-night vote to overturn a Consumer Financial Protection Bureau (CFPB) rule that cracked down on the usage of mandatory arbitration clauses by financial firms, harming consumers.

After Equifax recently announced that the personal information of 143 million consumers had been leaked in a massive data breach, the company drew immediate public ire for initially inserting a forced arbitration clause into their credit monitoring sign-up agreement to deny people their right to sue or join a class action lawsuit.

Banks have used similar "forced arbitration" clauses buried in the fine print of contracts to stop consumers from holding their banks accountable when the bank rips off a consumer.

Working men and women are routinely denied their day in court due to forced arbitration clauses, and Equifax was not the first galling example. Santander Consumer illegally repossessed the car of Charles Beard, a national guardsman on duty in Iraq, and threatened to have his wife arrested if she didn't turn over the keys. There was a forced arbitration clause hidden in his contract, so he was unable to sue Santander for this violation of the Servicemembers Civil Relief Act (SCRA).

In July, the CFPB issued a new rule to stop banks from using forced arbitration clauses to block class action suits. Many Republicans in Congress got right to work doing the Wall Street banks' bidding. The House passed a "Congressional Review Act" resolution to overturn the CFPB's rule, and the Senate passed it this week in a late-night vote with very little media scrutiny.

This GOP vote was a victory for Wall Street lobbyists, who mounted an enormous pressure campaign on the Senate to try and pass this harmful resolution into law. Given the rampant abuses and failures routinely seen in the finance industry—from Equifax to Wells Fargo to Santander—it’s no wonder that these lobbyists want a “get out of jail free” card.

Wall Street banks have managed time and time again to get a special set of rules that benefit them. From the bank bailouts to Wall Street’s numerous tax loopholes to their ability to use forced arbitration clauses to facilitate their abuses, Wall Street has gotten preferential treatment for far too long.

Learn how CWA is fighting back here.