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Senate Strips Class-Action & Consumer Rights, Scoring a Win for Big Banks

By: CSCS

In the wee hours of Tuesday evening, October 24, 2017, the Senate voted to kill a regulation giving U.S. consumers flexibility to sue their banks and other financial institutions. The rule was published by the Consumer Financial Protection Bureau (CFPB) this past July to bar companies from utilizing forced arbitration clauses against consumers.

Forced arbitration has been found to simply be bad news for consumers. In a statement released by CFPB in July of 2017, they noted that by blocking group lawsuits, companies are able to:

  • Deny consumers their day in court
  • Avoid paying out big refunds
  • Provides consumers less overall relief than in class actions
  • Continue practices that are harmful to consumers in order to generate profit

Specifically, the rule would have empowered customers of credit card companies, banks, and other financial institutions to join together in class-action law suits if they felt or knew that they had been wronged. The deciding vote was cast by Vice President Mike Pence. This is unequivocally a win for Wall Street and big banks, and a loss for the everyday consumer.