True to a longstanding dislike for the Consumer Financial Protections Bureau, President Donald Trump collaborated with bankers to undo a rule governing forced arbitration.
The move brought the commander-in-chief praise from corporate executives, who’d derided the CFPB regulation as unfair and costly.
The CFPB measure was intended to stop banks from barring their customers from joining in class-action lawsuits against them.
In July, the House passed a resolution to repeal the rule. Three weeks ago, the bill resolution passed into the Senate before making its way to Donald Trump’s desk Wednesday.
The Hill reports that Trump signed the resolution in the Oval Office, surrounded by appreciative banking lobbyists. Among the attendees were the heads of the Consumer Bankers Association and the National Association of Federally-Insured Credit Unions.
Critics of the arbitration rule say the study the CFPB used to design its regulation was flawed and misleading.
“Arbitration is a well-established and tested process that offers better results for consumers and helps avoid frivolous class action suits,” said Independent Community Bankers of America President Camden Fine.
“[ICBA] thanks the president for swiftly signing this measure into law because it preserves community banks’ contractual right to pursue fair and timely resolution through arbitration and avoid prohibitively expensive and protracted litigation,” said Camden.
Despite the near-universal gratitude from bankers, Democrats and the CFPB criticized President Trump for taking the side of big money rather than helping consumers secure a good deal.
Liberals and Trump critics claim that denying consumers the ability to engage in or pursue class action suits ‘defrauds’ them of a basic right, and the CFPB’s rule was among the best efforts to end a patently unfair practice.
“This action tips the scales of justice in favor of Wall Street banks less than 10 years after they caused the financial crisis,” said CFPB chief Richard Cordray. “By blocking our arbitration rule, this action makes it nearly impossible for ordinary people to stand up for themselves against corporate giant like Wells Fargo and Equifax.”
Cordray has frequently butted heads with President Trump, the latter of whom has expressed interest in dissolving the CFPB and firing its director.
A CNBC report from Friday says the resolution’s signing ‘devolved’ into a ‘venting session’ about Cordray between Trump and bank lobbyists.
President Trump purportedly said the only reason he hasn’t removed Cordray from his post is because he’s afraid the CFPB chief would become a “martyr” for the Left.
Sources
Trump repeals consumer arbitration rule, wins banker praise
Trump wants to sack consumer protection chief but is afraid of turning him into hero for the left
Join the conversation!