Lawmakers give big gift to big banks, credit card companies

WASHINGTON—The Republican-run Congress, by the narrowest of margins, has given a big multi-billion-dollar legislative gift to big banks and credit card companies, while shafting consumers at the same time. The labor movement, combat veteran who’s also a U.S. senator and veterans’ groups are urging Republican President Donald Trump to veto it.

Whether they’ll succeed is dubious. Trump‘s own Office of Management and Budget recommends that he sign it.

By a 51-50 vote late at night on October 24 – with GOP Vice President Mike Pence breaking a tie – the Senate sent legislation to GOP President Donald Trump to uphold mandatory arbitration, imposed by the financial firms, on consumers when they get into disputes.

The GOP-run House previously approved the measure 231-190. Only three congressional Republicans defied their party and voted for consumers: Sens. Lindsey Graham (S.C.) and John E. Kennedy (La.,) and Rep. Walter Jones (N.C.). All the Democrats in both Houses voted for consumers and against mandatory arbitration.

The Consumer Financial Protection Bureau issued a new rule banning mandatory arbitration, without recourse to the courts, earlier this year, but the legislation kills it.

CFPB is not the only federal agency that has moved against mandatory arbitration clauses. The National Labor Relations Board has tossed them out of individual employment contracts for non-union workers – and out of union contracts, too – left and right. It says mandatory arbitration’s ban on class action suits violates workers’ labor law rights to band together for mutual protection and advancement.

Employers are trying to overturn that, too, in a case the Supreme Court heard in early October.

Congressional Democrats and consumer groups denounced the pro-mandatory arbitration measure. So did the AFL-CIO, the Union Veterans Council, the Teachers, vets groups and even some Tea Partyites.

“When you’re deployed for 15 months,” as he was twice in Iraq, “it’s hard to keep track of financial transactions,” said William Attig, executive director of the Union Veterans Council. The financiers know that. “The military” and their families “have been the target of predatory lenders,” he told an October 31 telephone press conference.

The legislation denies the vets the right to fight back in court, Attig added. The financial interests put on a $38 million lobbying campaign for their pet bill, overcoming the opposition of labor, the vets and consumer groups, all of whom backed the CFPB.

“The rule would have allowed consumers access to courts after big banks like Wells Fargo steal their identity, or credit bureaus like Equifax compromise consumers’ most personal information,” the National Consumers League said after the Senate vote. Coincidentally, NCL gave its highest honor for defending consumers, the Trumpeter Award, to CFPB Director Richard Cordray the next night.

“Last night, while most Americans were sleeping, 50 Senate Republicans and Vice President Pence voted to take away our sacred right to a day in court,’ NCL Executive Director Sally Greenberg said.

“In the aftermath of massive financial wrongdoings like Wells Fargo’s nearly 1.4 million fraudulent accounts scandal or Equifax’s massive data breach, financial companies will continue to be free to bury binding arbitration clauses in their terms. These ‘rip-off clauses’ are designed to prevent consumers from having their day in court or joining together to form a class action lawsuit after they are harmed.”

The rip-off clauses are so bad, Greenberg said, that the league yanked its operating capital out of one bank that forces customers to sign such clauses, Wells Fargo, and transferred it to the Bank of Labor, a Kansas City-based union-owned bank without such mandates. That bank just opened a D.C. branch a block from the AFL-CIO building.

“The Senate’s decision to side with Wall Street over consumers is shameful,” added Greenberg. “The denial of one of our most basic rights as Americans — the right to our day in court — is a massive step backwards for consumers and our nation. While this may be a setback, the league will continue fighting before Congress and the administration to reaffirm consumers basic rights, including, the right to justice,” she vowed.

Sen. Sherrod Brown, D-Ohio, led the charge against the banks and the credit card companies in the heated Senate floor debate. “What Congress is trying to do today as long as it takes, as long as the arms are twisted, is frankly outrageous,” Brown, a noted consumer advocate and top Democrat on the Banking Committee, told his colleagues.

“Our job is to look out for the people whom we serve, not to look out for Wells Fargo, not to look out for Equifax, not to look out for Wall Street banks, not to look out for corporations who scam consumers.

Forced arbitration, pure and simple, takes power away from ordinary people. It gives it to the big banks, it gives it to Equifax, it gives it to Wells Fargo, it gives it to Wall Street companies that already have an unfair advantage. “

And Sen. Tammy Duckworth, D-Ill., a decorated Iraq War veteran who lost both legs when an improvised bomb exploded under her helicopter, told the press conference Trump should “stand for our troops,” not the banks.

“We enacted (monetary) protections for our service members. They’re nullified by this bill,” she said.

Brown and Duckworth particularly slammed Equifax, one of three firms in the U.S. that rates consumers’ creditworthiness – and its ratings help determine whether you can get a mortgage, a car loan, or money to send your child through college.  After “it compromised the personal data of more than 145 million Americans,” Brown explained, Equifax offered them a year of credit monitoring, in exchange for signing away their rights to sue. The legislation on Trump’s desk writes that denial into law.