Extensions of Remarks E1077 EXTENSIONS of REMARKS
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July 28, 2017 CONGRESSIONAL RECORD — Extensions of Remarks E1077 EXTENSIONS OF REMARKS PROVIDING FOR CONGRESSIONAL class action bans to create fraudulent ac- use of forced arbitration clauses in the fine DISAPPROVAL OF THE RULE counts, overcharge customers with debit fees print of financial contracts. The rule has two SUBMITTED BY BUREAU OF CON- and mortgages and avoid responsibility for components: SUMER FINANCIAL PROTECTION misconduct. H.J. Res 111 would remove fed- 1) Restores consumers’ day in court and ac- eral protections for members of the military countability when companies engage in RELATING TO ARBITRATION widespread violations of the law. Contracts AGREEMENTS from evictions and-repossessions while they that have forced arbitration clauses will not are on active duty. And, H.J. Res. 111 would be permitted to ban consumers from banding SPEECH OF deny consumers the ability to get fair com- together by joining or bringing class actions HON. KEITH ELLISON pensation for harm. involving consumer financial services. For those reasons, and more, we urge you 2) Brings transparency to the secretive ar- OF MINNESOTA reject a resolution that shields companies from bitration process. Companies that use forced IN THE HOUSE OF REPRESENTATIVES responsibility for risky and illegal conduct. arbitration in individual cases must report Tuesday, July 25, 2017 Today is another example to show the court filings, arbitration claims and rulings American people just how much Republicans and other information to the CFPB (with Mr. ELLISON. Mr. Speaker, for far too long, want to rig the system for the powerful. A vote identifying information redacted) so that the people’s legal rights have been limited by the FOR this resolution is a vote to rig the rules CFPB can study the impact of forced arbitra- use of forced arbitration clauses in contracts tion in individual cases. to take money from the pockets of the Amer- for consumer financial products and services. The rule applies to the core consumer fi- ican people and put it into the pockets of the Forced arbitration clauses, also called manda- nancial markets involving lending money, financial sector. storing money, and moving or exchanging tory pre-dispute clauses, prevent cheated or H.J. Res. 111 puts the profits of banks, stu- defrauded American consumers from going to money. With some exceptions, the rule would dent loan, car loan and mobile wireless pro- cover most: court to challenge wrongdoing by big banks, viders, credit card companies, payday lenders, Loans and credit, including credit cards, cell phone providers, auto leasing and auto fi- debt collectors over the fair treatment of the payday loans, student loans, and auto loans nancing firms, credit repair, payday lenders, American people. (auto finance companies, not auto dealers, debt collectors and credit card companies. How? except some buy-here/pay-here dealers). Most arbitration clauses for financial products For far too long, people’s legal rights have Mortgages are already prohibited from hav- also prohibit consumers from participating in been limited by the use of forced arbitration ing forced arbitration clauses. Providing class actions. Forced arbitration clauses have clauses in contracts for consumer financial leads, referrals, purchasing, selling and serv- been opposed by conservatives and progres- products and services. Forced arbitration icing credit are covered. sives. Bank accounts, prepaid cards, money clauses, also called mandatory pre-dispute ar- transfer services and apps and remittances. Forced arbitration is a secret process where bitration clauses, prevent cheated or de- Credit reporting, credit scores, credit mon- consumers seek redress at private firms cho- frauded American consumers from going to itoring. sen by the financial institution. This rigged court to challenge wrongdoing. Credit repair, debt management, debt set- system is why banks and lenders receive If your bank opens a fake account in your tlement, and debt relief services, including more than a million dollars per year paid out name, if your student loan lender refuses to those that purport to avoid foreclosure. This to them by their customers in forced arbitra- adjust your loan due to your loss of income, includes debt relief involving. medical debt, tion, compared to just $86,216 returned to if your bank re-orders your debit transactions taxes, and other kinds of debt even if not consumers. While advocates for the financial to maximize overdraft fees, it was frequently credit related. sector are correct that (sixteen) consumers re- impossible for you to join with others to sue Check cashing, check collection, check guaranty services. cover an average of $5,400 in arbitration the bank as part of a class action. But two weeks ago, the Consumer Financial Auto leases, but not auto dealers who as- every year, they leave out the fact that banks sign their leases. and lenders receive an average award of Protection Bureau responded to demands Debt collection and payment processing re- $13,195 when they win—and they win 93 per- from consumers and changed the rules to pro- lated to these products or services. cent of the time. Indeed, a recent report found tect consumers. The Consumer Bureau told Mobile wireless providers that allow third that consumers paid more restitution to Wells banks and lenders they cannot keep their cus- party charges through the wireless bill. Fargo in arbitration than the other way around tomers out of court. Class action lawsuits must Key areas that are not covered include: between 2009 and 2016, the prime years of its be allowed. And, the Consumer Bureau ended Auto dealers (other than somebuy-here/ fake account scandal. the secrecy that surrounds the arbitration pay-here dealers), such as claims related to discrimination, add-ons, lemon laws, odom- After years of effort, the Consumer Financial courts. Companies must report court filings, arbitration filings and rulings. eter fraud, or deception about a car’s his- Protection Bureau finalized a rule restoring tory. American consumers’ right to join together in The vast majority of the American people, consumer groups like the Consumer Federa- For:profit colleges and trade schools, un- court when harmed by systemic and wide- less the school directly makes loans. spread misconduct in the financial market- tion of America, the Military Coalition, and Credit cards, bank accounts and other place. The rule does not eliminate forced arbi- even conservative groups oppose forced arbi- products begun before the rule goes into ef- tration, but it would make individual secret ar- tration. fect. A vote AGAINST H.J. Res. 111 is a vote to bitration more transparent by publishing arbi- Services offered directly by governments allow people to receive adequate compensa- tration complaints and outcomes. It also per- or tribes to members within their jurisdic- tion for fraud, deceptive and predatory prac- tion. The rule does apply to tribal payday mits class action lawsuits. tices. lenders who offer products off-reservation. Instead of celebrating a rule that prevents fi- A vote AGAINST H.J. Res. 111 is a vote to Investment products and services by enti- nancial interests from evading responsibility, give Americans their constitutional right to ac- ties regulated by the SEC. Republicans seek to stop this rule under the cess the legal process. Individuals and others who offer a product Congressional Review Act (CRA). Today, they Please join me in voting against H.J. Res. or service to 25 or fewer consumers a year. presented H.J. Res. 111. 111. Nonfinancial products and services, like nursing homes, cable/mobile providers (ex- It is a vote to prevent consumers from re- I include in the RECORD various statement of cept for third party charges on bills), em- ceiving adequate compensation for fraud, de- opposition to the joint resolution. ceptive and predatory practices. ployers, or store payment plans that don’t [From National Consumer Law Center, July charge. A vote for H.J. Res. 111 is a vote to deny 2017] The rule applies to new contracts entered Americans their constitutional right to access SUMMARY OF CFPB RULE ON FORCED into 211 days after a final rule is published the legal process. ARBITRATION (likely Spring of 2018) and older contracts H.J. Res. 111 would protect companies like The Consumer Financial Protection Bu- that are purchased or acquired after that Wells Fargo that used arbitration clauses and reau (CFPB) has issued a rule addressing the date. ∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. VerDate Sep 11 2014 05:20 Jul 29, 2017 Jkt 069060 PO 00000 Frm 00001 Fmt 0626 Sfmt 0634 E:\CR\FM\A28JY8.001 E28JYPT1 E1078 CONGRESSIONAL RECORD — Extensions of Remarks July 28, 2017 JULY 25, 2017. action lawsuits, the consumers that choose reau, as congressional Republican leaders Re OPPOSE H.J. Res. 111, Congressional Re- to pursue arbitration tend to have high-dol- are reportedly rushing to do, would be a po- view Act resolution to repeal CFPB arbi- lar claims backed by strong evidence—and litical and policy mistake. tration rule and block future reform of even these sixteen consumers recover an av- Forced arbitration clauses waive a cus- forced arbitration. erage of just nine cents for every dollar tomer’s right to sue a company in case of a HOUSE OF REPRESENTATIVES, claimed. dispute. The fine-print provisions can be Washington, DC. It is no wonder that the financial industry found nowadays in seemingly every contract DEAR REPRESENTATIVE: Americans for Fi- prefers arbitration when consumers receive a we agree to, and every app we download. nancial Reform and Public Citizen write to total of just $86,216 per year. If Wells Fargo Business lobbyists defend the clauses as urge your opposition to H.J.