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Consumers may have a harder time suing financial companies they feel have wronged them.
The Senate voted Tuesday night to overturn a rule the Consumer Financial Protection Bureau worked on for more than five years. The final version of the rule banned companies from putting “mandatory arbitration clauses” in their contracts, language that prohibits consumers from bringing class-action lawsuits against them. It applies to institutions that sell financial products, including bank accounts and credit cards.
[...] “By forcing consumers into secret arbitration, corporations have long enjoyed an advantage in the process, and victims have often been precluded from sharing their stories with the press or law enforcement,” said Vanita Gupta, the president and CEO of the Leadership Conference on Civil and Human Rights, a group of advocacy organizations based in Washington, D.C.
[...] Mandatory arbitration clauses typically say that companies or customers must resolve disputes through privately appointed individuals known as arbitrators, but not through the court system, allowing companies to save time and money and avoid negative publicity. When consumers sign forced arbitration clauses, which they may not realize are included in contracts, they waive their right to participate in a class-action lawsuit against companies.
[...] The Senate's vote against the CFPB’s rule “is a win for consumers,” said Rob Nichols, the president and CEO of the trade group American Bankers Association. “As we and others made clear in our multiple comments to the CFPB, the rule was always going to harm consumers and not help them.”
Source: MarketWatch
(Score: 5, Insightful) by DeathMonkey on Tuesday October 31 2017, @05:22PM (16 children)
How is it even legal for a citizen to sign away his constitutional right to due process under the law in the first place?
We shouldn't need a CFPB here, we need SCOTUS.
(Score: 0) by Anonymous Coward on Tuesday October 31 2017, @05:43PM
^^^
(Score: 0) by Anonymous Coward on Tuesday October 31 2017, @05:59PM
How dare you question your corporate overlords...! Why do you hate Freedom, the Freedom to sell yourself into slavery! Don't you understand that anyone selling themselves into slavery is doing so because they genuinely want to do this, because it's their liberty to do so, because it gives them happiness, because they are getting the better end of the deal!
You ignoramus!
(Score: 5, Informative) by Virindi on Tuesday October 31 2017, @06:05PM
Unfortunately, they're the ones who created this problem. Over time they have gone out of their way to use BS "interpretation" (otherwise known as making stuff up) to make arbitration clauses as powerful as possible. Congress barely had to lift a finger.
Which is convenient for Congress, because that way they can claim it is not their fault but at the same time get the desired outcome: de facto civil immunity for superbigco against everyone else.
Just another way we have nothing like a "free market", with the system tilted towards the biggest entities and against anyone smaller wishing to compete with them.
(Score: 3, Informative) by Thexalon on Tuesday October 31 2017, @06:35PM (6 children)
Alas, not only has SCOTUS said that requiring consumers to use binding arbitration rather than the courts are perfectly legal, and have also said that this ruling trumps any and all state laws that might ban them. This is one of the contenders for "most important Supreme Court case you've never heard of":
AT&T Mobility vs Concepcion [wikipedia.org]
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 4, Insightful) by NewNic on Tuesday October 31 2017, @07:09PM (5 children)
Yeah, why don't you hear the Republicans crying about "States' rights" over this decision?
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
(Score: 2) by The Mighty Buzzard on Tuesday October 31 2017, @08:34PM (2 children)
I'm not a Republican but if you'd like to hear me say it's a bad decision, I'll be happy to do so. I generally don't get outraged when the courts fuck people and centralize power because I expect them to fuck people and centralize power. It's what you lot stacked them to do. There's only one guy on SCOTUS that even might remember the 10th Amendment exists and he just got appointed this year.
My rights don't end where your fear begins.
(Score: 2) by Virindi on Tuesday October 31 2017, @08:51PM (1 child)
Actually, you should read some of Justice Thomas' dissents. You might find more you like than you would expect.
He has also made it pretty clear that he disagrees with the post-1937 interpretation of the commerce clause, and he just goes along with it because there is no realistic way to fight it. In other words, he believes it is easier to fight overreach from within the system.
We already HAD one person on the court who believed in federalism, before this year. He is just smart about it.
(Score: 2) by Whoever on Wednesday November 01 2017, @05:12AM
Until he actually votes against over-broad interpretations of the commerce clause, it's all mental masturbation, or, he really doesn't disagree with those interpretations and he is just mugging for the crowd.
(Score: 4, Informative) by meustrus on Tuesday October 31 2017, @09:47PM (1 child)
Because the CFPB was created by Democrats so it is automatically evil. Republicans are supposed to look at everything bad and see a liberal conspiracy. Since liberals gave the CFPB the authority to make this rule, this rule must be part of the liberal conspiracy to steal our freedoms.
Disclaimer: Probably no Republican has this literal thought...besides the hypocrites at the top that are pushing the idea that the "unhinged" liberal conspiracy is "coming to get you".
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
(Score: 2, Offtopic) by meustrus on Wednesday November 01 2017, @03:08PM
Go ahead and mod this one -1 Off-Topic.
"Informative" is not the right mod for my comment above. I would appreciate "Insightful" or "Interesting", but "Informative" should be reserved for well-sourced information. No matter how much you agree with me, my ideas are not "Informative" unless they are based on hard data. This one is not. It's based purely on my own subjective experience.
Please stop modding these comments "Informative". I don't deserve it.
If there isn't at least one reference or primary source, it's not +1 Informative. Maybe the underused +1 Interesting?
(Score: 3, Informative) by Fluffeh on Tuesday October 31 2017, @11:35PM (4 children)
I was thinking the same thing the moment I read it actually. THere are some very consumer friendly laws in Australia that override this sort of thing actually - you just can't sign away certain rights:
https://www.choice.com.au/shopping/consumer-rights-and-advice/your-rights/articles/unfair-contracts [choice.com.au]
The section that defines what happens in an "Unfair Contract"
(Emphasis mine)
And then amoung the many definitions of unfair items:
(Score: 2) by Mykl on Wednesday November 01 2017, @03:57AM (3 children)
This is something that continues to puzzle me. I know that we can all sometimes act against our own interests at times in politics, but it seems that the citizens of the US have raised this to an art form. If you don't like this law then simply vote out the party that is furthest from what you want, or vote in the party that is nearest to what you want.
Yes, yes, there are lots of issues to consider together, and you shouldn't be a one-policy voter, but this one clearly shows who has your back and who is in it for themselves (or their corporate masters).
I struggle to understand how a group of politicians can enact such a consumer-hostile law and not expect massive backlash from it.
My prediction - instead of Class Action lawsuits, these companies will now be flooded with 1-star reviews on Facebook et al. Either that or the CEO will be accused of having sex with underage animals or something.
(Score: 4, Insightful) by Whoever on Wednesday November 01 2017, @05:16AM
Because they like one thing that the current Republicans have done and it dominates everything: normalized racism. Republican voters would prefer to be poorer as long as the darker-skinned people are poorer than them.
(Score: 1) by khallow on Wednesday November 01 2017, @03:11PM
[...]
I disagree that it is consumer-hostile. Litigation is a considerable cost-driver for everything in the US and has resulted in a lot of stupid, costly decisions over the years. Arbitration is a band aid over that.
(Score: 2) by nobu_the_bard on Wednesday November 01 2017, @04:03PM
This is because of a misconception that the party in power is the one causing this specific problem and the party that's not in power (because there's only two, right?) wouldn't have caused it, and the voters chose the wrong party. They didn't choose the wrong party, in this specific sense. The other party would either have made either this precise mistake or something that was functionally similar, most likely. The only difference would be how they sell it to their supporters.
(Score: 0, Flamebait) by khallow on Wednesday November 01 2017, @05:03AM
It's always been possible. For example, consenting to a search by police when they don't have the slightest reason to search you or waiving your right to have an attorney present while the police question you.
As to the CFPB, it's not their job to come up with laws, that's Congress's job. Sure, the public needs some protection from abusive arbitration schemes, but lawsuits are way out of control. That's why arbitration is such a thing in the first place. We need to keep in mind that one of the big donors to the Democrats, the side that created the CFPB, are lawyers. Arbitrage cuts enormously into their business.
My view is that the CFPB should be dismantled. It doesn't serve a legitimate role (there's lots of federal agencies that already serve to protect consumers from bad suppliers). And by being funded through the Federal Reserve rather than Congress, they're way too independent of Congress and the President. That creates a precedence that future presidents can take advantage of to create their own very independent organizations.