IN THE MIDDLE of a consequential week for the future of American health care, Senate Republicans are hoping to sneak through a controversial nullification of a key rule from the Consumer Financial Protection Bureau.
Republican leaders are whipping to secure the votes to overturn a rule CFPB finalized in July, which would protect financial companies from class-action lawsuits and deny consumers a day in court. The rule is among the most consequential actions the CFPB has taken since its founding.
An added wrinkle here: Executives for both Wells Fargo and Equifax, both accused of ripping off millions of consumers, will testify in Senate committees next week. Both companies have used arbitration clauses in an attempt to deny consumers access to the courts. By getting the arbitration vote out of the way before the hearings, Republicans can avoid having to hand a gift to financial companies while Wells Fargo and Equifax sit squarely in the public spotlight. With Obamacare repeal sucking up all the oxygen, this week offers a perfect cover.
“This rush toward a vote in the Senate is a cynical attempt to roll back an important consumer protection before anyone gets straight answers from Equifax and Wells Fargo about the damage they’ve done to the financial lives of millions of Americans,” said Lisa Donner, executive director of Americans for Financial Reform.
Senate Majority Leader Mitch McConnell, R-Ky., recently told financial industry lobbyists at a dinner in Washington that he planned to bring the bill to the floor as soon as he had the votes, according to a Republican at the dinner.
The CFPB’s rule bars consumer financial contracts from including clauses that force disputes into an arbitration proceeding, instead of allowing customers to join together with others in a class-action lawsuit. Critics say this gives financial institutions a license to rip people off, confident that only a maniac would go through years of costly arbitration to recover an erroneous $30 charge. “That is exactly what the banks are counting on. … They can get away with nickel and diming you forever,” said Sen. Elizabeth Warren, D-Mass., in a Senate floor speech Monday night.
Rumors are bouncing among Democrats in the Senate and on K Street that McConnell could bring it to the floor for a vote as early as Tuesday. But with Alabama Sen. Luther Strange out campaigning, that makes a Tuesday vote highly unlikely. Don Stewart, a spokesperson for McConnell, noted that a vote is not yet on the schedule.
Later in the week, however, could be more likely, particularly if Strange loses his primary, which would give McConnell his second major loss in two days. At that point, a win on the arbitration rule looks awfully enticing.
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