The latest complication for critics of the Consumer Financial Protection Bureau’s arbitration rule: Equifax.
A recently announced data breach that struck consumer credit firm Equifax exposed the personal data of 143 million Americans. In unrelated, ongoing news Wells Fargo was fined $100 million by federal regulators for opening illegal, unauthorized accounts. Troubles at both firms are the subject of hearings next week before the Senate Banking Committee.
These two high-profile cases are now part of efforts to kill the Consumer Financial Protection Bureau’s controversial arbitration rule.In July, the CFPB finalized a rule banning mandatory arbitration clauses. These clauses are commonly used by credit card companies and financial services firms to limit class action lawsuits.
The House of Representatives has already voted to overturn the CFPB’s rule. Senate Republicans are expected to also vote to kill the rule, as early as this week.
Senate Democrats are using Equifax and Wells Fargo as Poster children to sway their peers away from repeal.
External advocacy groups are also throwing their pro-arbitration hat in the ring. The progressive group Allied Progress is among those leading the charge.
“Recent reports indicate that after failing again to pass health care repeal, Senator Mitch McConnell (R-K.y.) has decided to take his frustration out on essential consumer protections by repealing new rules that could hold financial institutions like Equifax and Wells Fargo accountable when they take advantage of consumers,” a statement from the group says.
McConnell’s leadership team is busy trying to whip votes for the ruling. “But things aren’t looking good,” says Executive Director Karl Frisch. Sen. Lindsey Graham (R-S.C.) is against repealing the rule; President Trump announced this morning on Twitter that an unnamed Republican Senator is currently hospitalized and unable to vote on any measure this week; and handful of Senators, including Sen. Collins (R-ME), Sen. Murkowski (R-AK), Sen. Kennedy (R-LA) and Sen. McCain (R-AZ) are undecided or have not said how they plan to vote.
“It’s clear McConnell is frustrated with his party’s failure to pass any legislation, but ripping off consumers to get a cheap win isn’t the way to repair his bruised reputation,” Frisch says. “With so many Republicans already on the fence about repealing the CFPB’s arbitration rule, McConnell and members of his caucus should think twice before putting this up for a vote.”