New Rules Will Give US Consumers Power to Sue Banks

CFPB Completes Rule Allowing Class-Action Lawsuits Against Banks

This CFPB rule will prevent Wells Fargo and other wrongdoers from blocking groups of consumers from taking them to court.

"Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together", CFPB Director Richard Cordray, an Obama appointee, said in a statement.

Eliminating mandatory arbitration "could result in less effective consumer protection and remedies, while simply enriching class-action lawyers", he wrote, adding the rule "may potentially decrease the products and services offered to consumers, while increasing their costs".

"We are disappointed that the Bureau has chose to move forward with a final rule", said Bill Himpler, executive vice president with AFSA. Compass Point analyst Isaac Boltansky said in a note the effort to reverse the arbitration rule is "far better positioned politically" than the prepaid rule, but the fate of the rule will "be determined by public perception" in the weeks to come. Congress also authorized the Bureau to issue regulations that are in the public interest, that are for the protection of consumers, and which are based on findings that are consistent with the Bureau's study of arbitration.

Mandatory arbitration clauses are already disallowed in mortgage contracts signed after 2012.

Sen. Tom CottonTom CottonLawmakers press Sessions over online gambling GOP senator targets consumer bureau arbitration rule for repeal Granting NSA permanent bulk surveillance authority would be a mistake MORE (R-Ark.) said Tuesday morning he would seek the repeal of a new Consumer Financial Protection Bureau (CFPB) rule cracking down on arbitration clauses in customer contracts with financial firms. While these clauses can block any lawsuit, companies nearly exclusively use them to block group lawsuits, which are also known as "class action" lawsuits.

"The rule should be thoroughly rejected by Congress", said Republican Congressman Jeb Hensarling of Texas, the CFPB's biggest foe in Congress and chairman of the House Financial Services Committee.

The CFPB did not share the final rule with him ahead of the announcement, according to an Office of the Comptroller of the Currency spokesman. The Chamber of Congress said it would "consider every approach" to address these concerns and called on Congress to set checks and balances before the agency "takes more one-sided, overreaching actions". "The last thing Americans need is more anti-business regulation that will prompt frivolous lawsuits while hurting consumers". "The consumer agency's rule will stop Wall Street and predatory lenders from ripping people off with impunity, and make markets fairer and safer for ordinary Americans".

Following up on its proposed rulemaking issued in May 2016, the bureau contends that its final rule will assure consumers "get their day in court", and will "deter wrongdoing by restoring consumers' right to join together to pursue justice and relief through group lawsuits". Companies must also provide redacted records of claims and awards reached through arbitration, which the CFPB will post on its website beginning in July 2019. The agency put forth a rough draft of its ban a year ago, and issued a study in 2015 looking at arbitration clauses in the industry.

"We are not happy, but it's not surprising", said Richard Hunt, president of the Consumer Bankers Association, the trade and lobbying group that represents large retail banks like Bank of America, Wells Fargo, JPMorgan Chase and others. The study found that arbitration agreements, namely the class-action waivers tucked in them, restrict consumers' ability to favorably resolve disputes with financial institutions.

Related News:

  • 'I was devastated': Blac Chyna speaks out after Rob Kardashian leaked photos

    'I was devastated': Blac Chyna speaks out after Rob Kardashian leaked photos

    Chyna said , "I'm just going to get back to co-parenting Dream ", referring to her daughter with Kardashian born last November. Blac Chyna has spoken out about Rob Kardashian's revenge porn attack in an explosive interview for Good Morning America .
    News of Eminem's ninth album has just been leaked

    News of Eminem's ninth album has just been leaked

    Eminem is now putting together his ninth studio album and has teamed up with his mentor on some of the new tracks. You might hear some of Jon Connor's style too. "You know, this like rap talk".
    USA  practice bombing run a provocation, says North Korea

    USA practice bombing run a provocation, says North Korea

    Air Force F-16 fighter jets joined the bombers as they flew over the peninsula. Trump the same day warned of a "severe response" to the latest missile test.
  • Okla. Man Proposes To Girlfriend While Being Arrested, She Said 'Yes'

    Okla. Man Proposes To Girlfriend While Being Arrested, She Said 'Yes'

    The officers couldn't believe what was happening but made a decision to help Thompson during his big moment. Thompson said he is trying to turn his life around and told his mother he is "tired of running".
    Amazon is unleashing a new service that should terrify Best Buy

    Amazon is unleashing a new service that should terrify Best Buy

    The service is now only available in Seattle, Portland, San Francisco, San Diego, Los Angeles, Orange County and San Jose, CA. Geek Squad, with its mobile staff of technicians, was seen as an area that would be harder for Amazon to disrupt.
    Burhan Wani death anniversary: Security beefed up as Valley on high alert

    Burhan Wani death anniversary: Security beefed up as Valley on high alert

    His death triggered months of violent street protests in Kashmir that left 100 people, majority civilians, dead. India also cut off all internet services and blocked all roads leading to Tral, the hometown of Wani.
  • AFP cool on 5 years of martial law

    Meanwhile, 1,722 civilians who were held hostage or trapped in the main battle were either rescued or brought out of harms way. These include leaders of the Maute group and Abu Sayyaf senior leader Isnilon Hapilon .
    Elon Musk Tweets Photos Of New Tesla Model 3, Production Underway

    Elon Musk Tweets Photos Of New Tesla Model 3, Production Underway

    That said , there are legitimate questions as to the level of testing and pre-production work done on the Model 3 . Interestingly, Tesla hasn't made any updates regarding Model 3 on its blog since April 6.
    NSE trading resumes three hours after 'technical glitch'

    NSE trading resumes three hours after 'technical glitch'

    The key stock exchange has attributed the problem to a technical glitch, vowing to resolve the issue as soon as possible. Two sources familiar with the matter said it was an internal issue, ruling out any external cyber attack or hacking.
  • Male only island given natural heritage status

    Male only island given natural heritage status

    Other restrictions require men to take off their clothes and undergo a cleansing ritual, before stepping foot on the island. Priests from a group of Shinto shrines called Munakata Taisha are permitted to travel to worship at the site.
    Priest arrested in road rage incident

    Priest arrested in road rage incident

    The 35-year-old then "pointed a semi-automatic handgun" at the two people in the truck from his Chevrolet Corvette, police said. Lucie County Sheriff's Office and submitted as evidence, the report said.
    Joel Embiid extremely anxious  Fultz left game

    Joel Embiid extremely anxious Fultz left game

    Fultz was a member of the 2016 Team USA Under-18 team that won the FIBA Americas World Championships last July. Both Joel Embiid and Ben Simmons have had to sit out entire seasons due to injuries.


Most liked

LaVar Ball Defends Lonzo's Awful Summer League Debut: 'He Changed the Culture'
That he plays for the high-profile Lakers only increases the scrutiny from a large contingent of people rooting for him to fail. Brandon Ingram has already been shut down for the summer after suffering a leg cramp during the team's opener on Friday.

International Olympic Committee hesitates to help Rio de Janeiro with 2016 Summer Games debt
Budgett cautioned that only an interim form of the testing unit might be ready to operate at the Olympics in seven months' time. An ethics committee of the IOC in charge of investigating the Sochi Games should make its report in a few weeks.

Governor: 'The entire NY family grieves today'
Army soldier is accused of shooting and killing a New York State Police trooper who was responding to a domestic dispute. The CBS affiliate in Watertown says, 32-year-old Justin Walters appeared in town court around 4 this morning.

Glacier White PlayStation 4 Pro Available In Destiny 2 Bundle
Taken at face value, this bundle shows savings of right around $40 for anyone who was going to get all this stuff anyway . PlayStation 4 players will have access to bonus content before it's available on other platforms.