He promised to drain the swamp, but he just threw consumers into the muck.
I wrote this summer about one of the coolest things the Consumer Financial Protection Bureau has ever done: ban big banks from forcing consumers into arbitration agreements. Those agreements mean consumers who want bank accounts can’t jump on a class action lawsuit with other people who get ripped off, no matter how blatant the bank’s bad behavior.
Nope, you had to go one-on-one against a corporation up until the CFPB stopped it. And now Congress and Donald Trump have stripped that protection away, blocked the CFPB from making a similar rule, and put things right back how they were. Make Banking Great Again!
Sue as I say, not as I sue
Donald Trump is no stranger to lawsuits. Not only does he threaten to sue all the time, he often follows through. Before the election, USA Today did a huge story on more than 3,500 lawsuits Trump was involved in — and for more than half he was the one doing the suing.
He’s sued other people for being named Trump, his ex-wife for talking about their relationship, the guy who invented Jeopardy! and Wheel of Fortune, and a Miss USA contestant who criticized his show. Suffice to say there’s no slight too small for Donald Trump to file a lawsuit over.
CFPB Director Richard Cordray appealed to that experience (and Trump’s ego) to try and change his mind:
You and I have never met or spoken, but I am aware that over the course of your long career in business you often found it necessary to go to court when you thought you were treated unfairly. Of course, most Americans cannot afford to do this on their own, so they have to band together to fight companies like Wells Fargo that opened millions of fake accounts or Equifax when it allowed sensitive personal data to be breached for more than 145 million Americans.
Many have told me I am wasting my time writing this letter — that your mind is made up and that your advisors have already made their intentions clear. But this rule is all about protecting people who simply want to be able to take action together to right the wrongs done to them.
I know that some have made elaborate arguments to pretend like that is not what is happening. But you are a smart man, and I think we both know what is really happening here.
Unfortunately, there isn’t much evidence Trump understands what is really happening here. He signed the resolution reversing the CFPB’s rule on Wednesday. I guess only rich people get to file lawsuits when they’re wronged.
The swamp wins again
Wall Street has put nearly a million dollars into Republican Rep. Keith Rothfus’ pocket since 2009. He’s the guy who sponsored the legislation to undo the CFPB’s rule. The American Bankers Association, the American Financial Services Association, and the U.S. Chamber of Commerce supported killing it. Every Republican senator on the Senate banking committee (except for one, John Kennedy of Louisiana) co-sponsored it and they, too, get lots of campaign money from Wall Street.
The White House said the rule just lines the pockets of “special interest trial lawyers” at the expense of… special interest big banks. Let’s just take that at face value: So what? Why are big bankers inherently better than lawyers? Why do they deserve money more? Everybody has a special interest in themselves.
And the rule would’ve helped a lot more people than it harmed. The CFPB’s years-long study, conducted to justify the rule, found class-action suits result in way better payout for wronged consumers than arbitration. At least 34 million people reached settlements worth $1 billion over the five-year period the CFPB studied. Conversely, in the roughly one thousand cases in the two years that were studied, arbitrators awarded a combined total of about $360,000 in relief to 78 consumers.
But, ultimately, the only special interest that matters to Donald Trump is Donald Trump’s.
The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the opinions and/or policies of Debt.com.
Article last modified on November 14, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Donald Trump Won’t Let You Sue Banks - AMP.
Article last modified on November 14, 2017. Published by Debt.com, LLC .