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Republicans just voted to give lawsuit immunity to the banks

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Floridatexan

Floridatexan


The 50-50 tie was broken by Vice President Mike Pence.

By Alexandra Jacobo - October 26, 2017 | News Report

Late Tuesday night, the Senate voted to make it impossible for consumers to come together to bring a lawsuit against credit card companies, auto lenders, credit reporting companies, and other financial firms.

Overriding an old rule created by the Consumer Financial Protection Bureau (CDPB) this new ruling essentially gives these financial institutions immunity from lawsuits.

The vote, which was a 50-50 tie in the Senate, was broken by Vice President Mike Pence and approved by the House. President Trump is expected to sign it as soon as possible.

The original rule, created by the CFPB, prevented financial firms from using “forced arbitration” agreements, in which a company refuses to do business with any consumer that will not sign away their right to sue the company in real court. Instead, consumers that sign away this right must resolve any disputes through privatized arbitration – a process that greatly favors corporate parties.

The CFPB rule also prohibited financial firms from requiring consumers to sign away their right to bring class action lawsuits. Now consumers can longer fight back against corporations that charge illegal fees.

Every Democratic Senator, and two Republican Senators, Lindsey Graham (R-SC) and John Kennedy (R-LA) voted to uphold the rule. Every other Republican Senator voted to reverse it.

The banking industry has been lobbying hard for this reversal and this will be a huge win for them. Rob Nichols, president of The American Bankers Association, said, “Today’s vote puts consumers first rather than class-action lawyers.”

Democrats said the rule was needed to give consumers leverage to stop companies from taking advantage of them financially. They used the most recent examples of the sales practices at Wells Fargo and the security breach at Equifax, both of which were protected through forced arbitration.

Republicans on the other hand insist that “forced arbitration” has worked “wonderfully” for consumers. Senator Mark Crapo, Republican chairman of the Senate Banking, Houseing and Urban Affairs Committee said, “The effort to try to characterize this as some devious system that has been created to try to stop consumers from having access to fairness is simply false. We have a very fair system that has been working for over 100 years in this country.”

As Democratic Senate Minority Leader Chuck Schumer stated, “Once again, we’re helping the powerful against the powerless.”


https://www.nationofchange.org/2017/10/26/republicans-just-voted-give-lawsuit-immunity-banks/

Deus X

Deus X

Equal Bargaining Power:
Corporation vs. Corporation


The Federal Arbitration Act (FAA)
developed in the commercial arena to enforce
agreements between corporations with equal
bargaining power. Since the enactment of the
FAA in 1925, national policy and the judicial
system favor enforcement of arbitration
agreements because courts are over-burdened
and litigation is often expensive and time consuming.


Legislators did not envision that mandatory
arbitration would be used as a tool to avoid
corporate accountability to consumers by
binding consumers to a pre-dispute arbitration
requirement before they have an opportunity to
evaluate the advantages and disadvantages of
arbitration verses litigation.

Unequal Bargaining Power:
Corporation vs. Consumer


A consumer and a business do not have equal
bargaining power and a mandatory arbitration
clause is in no way negotiated or bargained-for.

Mandatory Arbitration clauses are hidden in the
small print of many adhesion contracts.
Businesses include mandatory arbitration
provisions in contracts because these one-sided
agreements will almost always work to the
business’s advantage. For example, the clauses
often prohibit class action suits, discourage
individual consumer claims due to the high cost
of arbitration, and increase the business’s
advantage in multiple suits as repeat players.

Proponents of mandatory arbitration argue these
provisions provide one way to address an overburdened
court system. However, a number of
arbitration enforceability issues still end up in
court. For example, a party may have to go to
court to compel discovery or enforce a subpoena
because an arbitrator has no authority to do so.
It is less likely that the suit will stay out of court
because mandatory arbitration provisions are
one-sided and the opposing side/business often
retains its right to sue.
http://www.citizenadvocacycenter.org/uploads/8/8/4/0/8840743/mandatoryarbitrationbrochure.pdf

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