DawgTalkers.net Forums DawgTalk Palus Politicus Senate GOP moves to repeal consumer rule

https://finance.yahoo.com/news/senate-gop-moves-repeal-consumer-230226193.html

WASHINGTON (AP) -- The Republican-led Senate narrowly voted Tuesday to repeal a banking rule that would let consumers band together to sue their bank or credit card company to resolve financial disputes.

Vice President Mike Pence cast the final vote to break a 50-50 tie. The banking industry had been lobbying hard to roll back the regulation from the Consumer Financial Protection Bureau. The bureau had moved to ban most types of mandatory arbitration clauses found in the fine print of agreements consumers often enter into when opening a checking account or getting a credit card.

The vote reflects the effort of the Trump administration and congressional Republicans to undo regulations that the GOP argues harms the free market. The measure now moves to President Donald Trump's desk for his signature. White House press secretary Sarah Huckabee Sanders said the president applauded the vote.

"The rule would harm our community banks and credit unions by opening the door to frivolous lawsuits by special interest trial lawyers," Sanders said.

Democratic lawmakers said the CFPB's rule would have given consumers more leverage to stop companies from financial wrongdoing. They cited the sales practices at Wells Fargo and the security breach at credit company Equifax as examples of misdeeds protected through forced arbitration.

"So who does forced arbitration help? Wall Street banks and other huge corporations that never pay the price for cheating working people," said Sen. Sherrod Brown, D-Ohio.

Richard Cordray, director of the consumer bureau, said: "Tonight's vote is a giant setback for every consumer in this country. Wall Street won and ordinary people lost. This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company."

Republicans said the arbitration system has worked "wonderfully" for consumers. They said the payouts for the average consumer in arbitration cases are generally much larger and come more quickly than when compared to the relief gained through class-action lawsuits.

"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," said Sen. Mike Crapo, the Republican chairman of the Senate Banking, Housing and Urban Affairs Committee. "We have a very fair system that has been working for over 100 years in this country."

Crapo said the average pay-out for consumers in class-action lawsuits against financial companies was just $32, but lawyers stood to make millions.

Democrats argued that consumers generally don't have the time and means to pursue claims in arbitration, and since most disputes revolve around small amounts, they typically just give up. They said banks and other financial firms know that in the end they won't have pay a real price for taking advantage of a consumer.

But class-actions would serve as a powerful tool for consumers, they said.

"Once again, we're helping the powerful against the powerless," said Senate Minority Leader Chuck Schumer, D-N.Y., as the Senate neared the vote, sensing the Democrats would lose.

Two Republicans sided with Democratic lawmakers to keep the rule — Sens. Lindsey Graham of South Carolina and John Kennedy of Louisiana.

The advocacy group Consumers Union and several veterans groups, including the American Legion, lobbied to keep the rule. They said consumers would still have the option to use arbitration to resolve a dispute, if both parties want to go that route.

"Without the CFPB rule, consumers can be forced into a rigged system where they have no recourse. It's a disgrace," said Linda Lipsen, CEO of the American Association for Justice, an advocacy group that works to improve the legal system.

The American Bankers Association cheered the Senate vote. "Today's vote puts consumers first rather than class-action lawyers," said Rob Nichols, the group's president and chief executive officer.

_______________

sad, very sad.

Frankly, I hate class action lawsuits, and feel that they benefit the lawyers far more than they do anyone actually "damaged" bu the company sued. Class action suits also require you to opt out of the settlement, so if you miss it in your mail, and want to sue later, too bad.

I think that all class action suits should be tossed. Most are idiotic to start with, and benefit only the lawyers.

Class action is only a subset case of this, however, and it's something that those who favored the repeal focused on to detract from all the negative side effects.

With all the special interests and campaign contributions/lobbying, the trend reflects the consumer losing a lot of power.

All those regulations they put on banks, do you know who it helped the most? WALL STREET and LARGE BANKS. It became too costly for small banks to operate, they were bought up/closed, and the big banks and fat cat wall streeters got richer.

I actually believe the regs were put in place with with good intentions, but they ended up hurting people more than they helped in the long run. Just the opinion of a someone who has been in banking for quite some time.

lol so they affirmed that we should have forced arbitration instead of a day at court. Good God. The psuedo-morality of some people.

That's an interesting take. I never worked in banking, but I worked in some things that tied to the 2008 fall-out.

One of the partners at the place I worked seemed to think regulations were a double-edged sword. On one end is your example. Regulations to create certain standards and hoop jumping to prevent the marketplace from becoming more competitive. We see that a lot with airlines now.

On the other hand, there is a lobbying for de-regulation and repeals of unrelated areas which the big banks lobby for. I think this repeal is one of those examples.

I was speaking in more generalizations of regs, not necessarily this one. But the facts are that when Obama did implement all those regs - all the big banks grew astronomically and the small savings and loan banks, community banks, etc. went out of business. so even though the large banks had to pay more with the regs and fines etc, the inherited so much extra business form the little guys folding - it helped them. they paid more, but made more.

**again I think the regs were put in place with good intentions, but the net effect was the opposite - consumers got hurt with less options, less competing for business etc.

Just curious ...

I know more about banking than Joe and Tommy Blow .. i’m Sure i couldn’t carry your jock in knowledge of it ... another words i know just enough to be dangerous .. *L* ...

Do u believe that the regs Obama put in caused the giants eating up the smaller banks ... or do u just believe the regs hastened the “mergers”?

I heard a good 5 years before the collapse that we were headed for 2 - 3 banks being the last man standing ...

Your thoughts?

If I have this right, we (meaning you and me and the rest of us) can no longer sue a bank for perceived misdeeds.

Yes, that's gonna teach those banks a lesson LOL

the former. A lot of the smaller banks survived the collapse pretty much unscathed, because they already had strict lending guidelines. They cant afford the losses big banks can, so they didn't really get hurt when the mortgages started to default. they were (for the most part) not taking on those risky mortgages because they had pretty strict guidelines and lent to only qualified buyers. Im sure they felt some of it, but not nearly like the others.

It was the regulations they could afford to implement, or pay lawyers/audit departments etc to keep up with that did them in.

You can still sue them as an individual, we just can't form a group and sue them collectively..

Might end up hurting the banks in the long run.. if one of them gets caught doing something wrong and has to defend themselves against 2000 different individuals verses one collective..

the only issue with that is - the odds that 2000 people will sue. a lot of people are not going to want to put the time/money in. and those that don't have the time/money to do will get still get screwed in that regard.

Oh, then I don't care. As long as I can do it on my own, I'm good. If it's public enough, others will sue individually... What a nightmare for the banks...

wouldn't that mean that they can't make a "one size fits all" settlement?

from my understanding, that is correct. They would have a separate case in each, with a separate ruling on each, with separate payouts to each.

Ty sir ....

I wondered if it was the regs or it was just going to happen anyhow ..

So Obama’s regs had a very negative affect ....

Seems like that one wasn’t a surprise ....

Did they see that end result before implementing the regs and thought the regs were worth the risk ... or u think they were so busy “protecting” us they didn’t think of the negative consequences? ..

Thats a tough one to answer ... let me know if u have any thoughts on that please ...

Thanks again ...

Sounds logical, although I'm more cynical than you are. It's hard for me to believe Washington's legislators have true, genuinely good motives.

Typical. So predictable.

Honestly, I think they had good intentions (somewhat ill explain that below), and just didn't see the end result. Others will say they knew and because a lot of those big banks are Dem backers, they did this knowingly. Maybe I am being naïve maybe others are just too cynical. Things like each side is going to push the opposite narrative no matter what.

(I think they saw an opportunity to be able to place regs and create revenue against a large market, and by doing so they were doing something to help. No one was going to complain as most were calling for it after the collapse. so it was win/win for them. They got to expand their powers, and the consumer was happy for the most part, and end result the big banks were happy)

Trump will push to level the playing field by reducing regs and give all of them a chance to succeed.

It is what he has done in other cases.

removing this is dumb.

he just gave the wells fargo's of the world to do whatever the hell it was they were doing before.

because people as individuals don't have the funds to go to war with big banks in the courtroom.

but of course the conservatives think that's a good thing.

I asked a question dude ... sorry to interrupt your BS while trying to get someone’s opinion on something ...

Thanks again man ... i could see that happening here ..... happens all the time ...

sometimes their mistakes and sometimes there not .. with our govt’s history I tend to think there taking care of their lobbyists as opposed to us ...

Others will say they knew and because a lot of those big banks are Dem backers, they did this knowingly. Maybe I am being naïve maybe others are just too cynical. Things like each side is going to push the opposite narrative no matter what.

And thats one of the problems ... its not about right or wrong anymore its about bashing the other side ...

Look at perfects response to me ...

(I think they saw an opportunity to be able to place regs and create revenue against a large market, and by doing so they were doing something to help.

U talking about tax revenue here? ... just want to make sure i’m clear on what u mean ..


No one was going to complain as most were calling for it after the collapse. so it was win/win for them. They got to expand their powers, and the consumer was happy for the most part, and end result the big banks were happy)


The very very rare WIN, WIN WIN ... *L* ..

We tend to over react as a country ...

Thanks again man ...

serious question: what do you mean we tend to overreact as a country?

the banks royally screwed the people over as they had no regulations to keep they asses in check.

are you saying that nothing should've been down following the collapse? that banks should've been given the A-ok to go back to doing the same crap they were doing?

well they were able to fine those banks and create revenue that way when they would violate regulations.

For instance HMDA regulation, if I didn't read that regulation to everyone applying for a loan, I could be held responsible and fined up to 10K, then my employer could be held responsible on top of that and fined as well. Where would those fines go ***to add to that, the person hurt would be the consumer applying, he wouldn't get the fine. he wouldn't get a restitution for that error I made, the government would. so who exactly was it to benefit?

Give the banks, who are experiencing record levels of profit, a chance to succeed? I think they are doing quite well already.

Yes, it means you can sue for as much as you want personally and they will have to deal with you individually... (But you could always do that just by opting out of any class action suit)

the bad news is that any bank, but especially a large bank, has almost unlimited resources to fight you and drag it on for years... you are probably going to have to be paying an attorney the whole time. So unless they really screwed you out of MILLIONS, you are quickly going to get to the point where it isn't worth the cash, the aggravation, or the risk to keep pursuing it.. then you will either give up or they will settle with you for pennies on the dollar.

People often complain about class action lawyers and yea, some of them are shady as hell.. but they put thousands and thousands of hours into a big class action suit for free unless they win... I don't know if they always deserve a third (or whatever they get) of the settlement... but they deserve a lot of money if they win...

You could be right but I have my concerns. Banks and people like Trump have attorneys on the payroll. Individuals have limited resources. When trying to fight a company, corporation, person or bank with virtually endless resources, it's very hard for people with very limited resources to have the ability to see the process through. Those with great wealth simply extend the process until those with limited resources can simply no longer afford to fight. Attrition makes it impossible to fight those with vast resources.

Not the smaller Banks, they continue to struggle.

Then you go to the Banks to get loans.

Got it ... i ASSumed it was the tax revenue .... not a fan of ASSuming ... hence the question ...

Thanks man ...

Another question if u don’t mind .... actually 2 or 3 ... nevermind i’ll Ask u one ... *L* ..

I’ve heard from a few friends over the last half year or so that the banks are starting to give out questionable loans again ...

Your thoughts on that ... do u know of that where u work or u hearing anything about it?

Smaller banks are struggling because so much banking has moved to on-line and they don't have the infrastructure to compete. You have to reach a certain size/scale before setting up all of those on-line features makes sense.

Can a small bank offer me better service at the window or the drive-thru? I guess they can... but I don't remember the last time I actually went to the bank.

Yes and No.

In short it depends on the loan product you are giving. A mortgage, a personal loan, a credit card etc. Each will have different guidelines and restrictions etc.

For instance on an FHA loan, the fed sets a minimum requirement to lend. However the banks can add above that requirement and make it stricter if they like (that's why the smaller banks didn't get in as much trouble we talked about earlier )

so on the mortgage side, as of now, they still have those min. requirements to meet.

On the auto, personal/unsecured side, it is getting lesser with restrictions and they are loosening the belt on what they will lend. HOWEVER, that is always a trend when the economy is doing better. There is less risk with a good economy, less lending guidelines from the bank. Hard econ, more guidelines from a bank, as there is more risk. any bank CFO worth his salt plays those lines in order increase revenues, its the ones that completely blow out their guidelines that will always get in trouble and have high default rates.

The place I am now, last year lowered our guidelines, not much but we lowered them. I have been able to approve just with a small decrease in guidelines YTD 120% over last year. GREAT, unless something happens and you have more defaults than you would have previously. Its all a chess game when it comes to that. When to lend, when not to lend, when to lower guidelines etc.

Last 720+ credit was A tier score, now its 700. 625 minimum score to qualify for ANY loan I can offer, now its 575. We used to use a derogatory score, where a late payment within 12 months was scored, and if you had 12 points total you were denied. You could have million dollar salary and a 650 score, but if you had a 12 derog i couldn't lend you a tic tac. they got rid of that, and now its completely on my discretion with the late payments. Unsecured debt maximum used to be 30% of your gross income, its now 35%. DTI used to be 40% now its 45%.

So with our changes, we are less conservative with lending, however myself and the others that lend are still pretty conservative that we have more decision making powers if that makes sense. All in all, like any business it relies on your loan officers to make good loans, and not just numbers

So you are saying Regulations had nothing to do with the Big Banks squashing or buying out the smaller Banks?

You are saying small Banks can not have an online presence?

i took it as him saying that while regulations played a part, it wasn't the main reason why bigger banks were succeeding over the smaller ones.

I took it as him being wrong again.

You can please everyone on this issue. The regs did not work, not having the regs people will fall through the cracks, but the benefits will be more. There is not a CURE ALL for every issue that some think there is. You look at the issue, see which if more will benefit than get hurt, and proceed.

The regulations hurt more than it helped. Local banks closed - let larger banks charge higher rates to more customers - they raked in more fees, more loans, more accounts because they didn't have to worry about local small banks acquiring those consumers.

Why keep it in place if it has not worked and had the opposite effect on what it was supposed to do? Honestly? Because it was obamas?

They didn't work, time to try something else. It only says it repeal this law, no one is stopping PittDAWG from creating a better one

He knows his masters voice.
https://i.pinimg.com/236x/61/c3/8d/61c38d3e0dfd1abc9a481f5318f3e097--carnagie-hall-antique-radio.jpg

That is utterly and absolutely incorrect Our online banking system offers mobile access, mobile deposit, transfers to you, other customers, transfers to OTHER institutions, as well as mobile deposit, pop money, and rewards. We are a very SMALL credit union.

Our cost to us on that, very minimal. Not even a blip on our expense report. We pay more sending out notices of data breaches than we pay for our online banking system. FYI - not that i am against those notices, but that is a REGULATION. So you can see, regs are the bigger cost

and to add - onine banking has allowed us to cut back on ATMS and other overhead thus SAVING us money on the balance sheet

'This was the Wells Fargo Immunity Act': Consumers lose the right to sue companies

https://finance.yahoo.com/news/wells-far...-154053444.html

For the 145 million consumers who watched Equifax play fast and loose with their financial data, it may be difficult to see how allowing companies to kill class-action lawsuits is a good thing.

“Tonight’s vote is a giant setback for every consumer in this country,” said Richard Cordray, the CFPB director, in a statement. “As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers.”

A popular bill for financial institutions, unpopular for consumers

“The bill was entirely and exclusively supported by the [finance] industry,” said F. Paul Bland, an attorney at Public Justice, a consumer group. “Every group that represents consumers was strongly against the bill.”

Bland listed special interest groups that opposed the bill: armed service member groups, senior citizen groups, civil rights groups. “Lots of polling said both Republicans and Democrats oppose the bill by heavy margins,” said Bland. “This was the Wells Fargo immunity act. It’s essentially a bailout for those companies.”

For Wells Fargo, Equifax, and other companies that behave badly on a major scale, preventing consumers from banding together to seek justice is a major boon that could save these companies from an unknowable amount of damages.

According to Bland, without class-actions, most consumers will not take action. “The argument that individual arbitration is better for consumers is laughable,” he said. “Look at Equifax: 145 million people. Each of them are supposed to separately file an individual arbitration for themselves? How many of them will even be able to find the American Arbitration Association’s website?”

Good lawyers and bad lawyers

The Trump administration said in the statement that the CFPB’s rule would have benefited “trial lawyers” with “frivolous lawsuits.” Putting aside judging whether suing Equifax or Wells Fargo for negligence might be considered “frivolity,” the Trump administration’s statement amounts to a blatant disregard for facts.

In the CFPB’s massive study on arbitrations, the agency examined more than 400 class-action lawsuits. The attorney fees ended up being just 18% of the money recovered on average — a far cry from lawyers-take-all.

Within the Trump administration’s comments about these “trial lawyers,” as the White House calls them, lies a hypocrisy, according to Bland.

“Mike Pence has a view of trial lawyers that basically adds up to: If you’re on the side of the rich and powerful you’re a good lawyer,” Bland said. “If a lawyer is representing an individual person, they’re a ‘trial lawyer’ and a leech on American society.”

Another scandal will happen, and this will bite the Republicans

In the past two years, two large companies have been exposed for bad behavior on a massive scale: Equifax and Wells Fargo.

“Down the road this is going to be a slow-rolling catastrophe for Republicans who voted for this bill,” said Bland. “I don’t think it’s likely the last significant time we’re going to see consumers totally cheated,” referring to Equifax and Wells Fargo

By removing consumers’ rights to class-action lawsuits, companies have less motivation to police their own behavior and play by the rules.

“The next time we discover something like Wells Fargo having a couple million people that they’ve opened phony unauthorized accounts for,l,” said Bland. “Fifty Senate Republicans and Mike Pence will own 100% of that scandal.”

See, told you so.^^^^^^