Protecting banks at the expense of consumers
You got ripped off this past week. But you might have missed it.
After all, it was also the week the Republican majority in the House of Representatives, acting on the federal spending plan passed to it by the Republican majority in the Senate, approved a budget resolution that takes the country down “the path of gimmicks, debt, and absolutely zero fiscal restraint.”
Those are not our words. Those are the words of the nonpartisan Committee for a Responsible Federal Budget. It also pointed to “a pathetic $1 billion in spending cuts” in the plan that “allows for $1.5 trillion to be added to the national debt.” Your debt.
It barely squeaked through 216-212. No Democrats supported it and 20 Republicans voted “no.”
It sets the stage for a proposed overhaul of the tax system, tilted to further enrich the wealthy and corporations, while doing away with deductions that largely benefit the middle class. It is also a plan that would push the nation deeper into debt.
“Make no mistake — this is a defining moment for the Republican Party,” read the statement issued by the CRFB. “After years of passing balanced budgets and calling for fiscal responsibility, the GOP is now on-the-record as supporting trillions in new debt …”
So given all that winning of the past week (Are you tired of it yet?) it is understandable if you may have missed the news of President Trump and his Republican lackeys in Congress cheating consumers of their rights in the interest of placating the big banks.
After the reckless behavior of the big banks played a major role in bringing down the economy in 2008, ushering in the Great Recession, Congress passed a series of regulatory reforms — the Dodd-Frank Act in 2010 — aimed at preventing a repeat of history. Trump and the Republicans are intent on repealing many of them.
Among the reforms was the creation of the Consumer Financial Protection Bureau to, as the name implies, protect consumers. After extensive study, the CFPB just this past July issued a ruling that credit card companies and lenders could no longer use “forced arbitration clauses” to block consumer lawsuits.
What’s a forced arbitration clause? Well, despite its name, it’s not fab. It’s buried in all that fine print you get when applying for a credit card or signing a loan. It states you have to resolve any dispute outside the court system, bound by a decision made by a private mediator — some guy hired by them — and you cannot turn to a judge or jury.
The CFPB said the heck with that. If a bank charges you a dubious hidden fee, or plays games to block access to your own money, or opens a sham account in your name without you knowing — stuff that has happened — you can use their mediation or you can sue. You can get together with other damaged consumers and sue collectively, too.
Lenders, confronting the potential for juries to make them pay if they tried to con consumers, were given the motivation to play it straight. They didn't like that.
But they didn't have to worry long.
Last week the Senate voted 51-50, with Vice President Mike Pence breaking the tie, to reverse the consumer-friendly rule. So no suing for you. Back to the mediator. The House had already passed the legislation. Trump pushed for it.
The mediation works fine, goes the Republican argument. Allowing consumers to sue credit card companies will just enrich attorneys, they say.
That’s baloney, of course. This is about appeasing Wall Street and the banks. Equal justice, it seems, is not for all.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Pat Richardson, Editorial Page Editor Paul Choiniere, retired Day editor Lisa McGinley, Managing Editor Tim Cotter and Staff Writer Julia Bergman. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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