Main Street Americans Should Be Able to Hold Financial Institutions Accountable for Wrongdoing

July 20, 2017

Main Street Americans Should Be Able to Hold Financial Institutions Accountable for Wrongdoing

Statement of Lisa Gilbert, Vice President of Legislative Affairs, Public Citizen

Note: Today, U.S. Sen. Mike Crapo (R-Idaho) and U.S. Reps. Blaine Luetkemeyer (R-Mo.) and Keith Rothfus (R-Pa.), along with several dozen co-sponsors in both chambers, introduced Congressional Review Act (CRA) resolutions blocking the U.S. Consumer Financial Protection Bureau’s (CFPB) recently finalized arbitration rule. Under the CRA, Congress can pass legislation with a simple majority vote that would strike down a rule within 60 days after it is finalized. The CRA introductions follow a new poll showing that three out of four voters support the CFPB’s mission and that two out of three voters back the ban on forced arbitration rip-off clauses in consumer financial contracts.

Big banks and other financial entities such as payday lenders bury “rip-off clauses” in the fine print of take-it-or-leave-it contracts to block class-action lawsuits and push disputes into secret and rigged proceedings biased toward companies. Since few consumers can afford to fight small-dollar disputes by themselves, banks can trick and trap customers with illegal charges and then pocket billions in stolen money. Without class-action lawsuits to keep things fair, corporate bad actors will get off scot-free when harming their customers. The CFPB took a critical step toward protecting the public with this long-awaited rulemaking, and members should consider which side of history they want to be on: for Main Street consumers or the big banks. This unpopular and ill-advised CRA challenge must be defeated.

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