Not so long ago, President Donald Trump along with many extreme Republicans promised to gut the The Dodd–Frank Wall Street Reform and Consumer Protection Act which was a bipartisan effort passed in 2010 to protect working people due to the financial collapse of 2007-08.
Dodd-Frank established an independent agency named the Consumer Financial Protection Bureau and then-President Barack Obama appointed Ohio’s Richard Cordray to lead the bureau. The bureau has established major protections for consumers against unscrupulous financial institutions, but perhaps the biggest blow to the Big Banks came this week.
Despite urgings by Congressional Republicans to fire Cordray and terminate the bureau, and hostility from the Trump administration, Cordray issued a new rule to hold Big Banks accountable by allowing consumers to enter into class-action lawsuits.
Bureau Director Richard Cordray said, “Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action.”
According to The Los Angeles Times: “Wells Fargo & Co. for years successfully used its arbitration clause to block lawsuits filed by customers alleging unauthorized accounts had been opened in their names, potentially allowing those practices to persist.
“The bank recently agreed to settle some class-actions suits, but not until the CFPB, the Office of the Comptroller of the Currency and the Los Angeles city attorney’s office fined the bank over those practices. Even in the cases that the bank settled, it argued that the plaintiffs could not sue because of arbitration clauses.”
The Congressional Review Act, or CRA, gives Congress the power to scrap some federal rules within 60 days of the date they take effect. The Chamber of Commerce is urging Congressional members to veto this needed rule.
“I am, of course, aware of those parties who have indicated they will seek to have the Congress nullify this new rule,” Cordray said in prepared remarks. “My obligation as the director of the Consumer Bureau is to act for the protection of consumers and in the public interest. In deciding to issue this rule, that is what I believe I have done.”