The banking industry has targeted the Consumer Financial Protection Bureau since the day it was created. The finance industry pours money into a relentless effort to weaken the agency. This continuous lobbying is done in the background, out of the eye of American consumers, who stand to lose the most if the CFPB cannot do its job. One important thing the CFPB has been tasked to do is study the effects of forced arbitration, a procedure which strips borrowers of the right to bring actions in court to enforce consumer protection laws and stop fraud. That study revealed huge injustices in the unlevel playing field between consumers and banks.
The subject of mandatory arbitration is complex, and frankly boring to most people. It is boring until they themselves are cheated by a bank. Or, when a finance company has made a mistake on their loan payments. Or, when they are illegally bullied by a debt collector. Or, when their car or truck has been repossessed and sold without notice. Or, when they are charged illegal interest rates. Or, when a debt collector they never heard of duns them for debts they did not owe. Then arbitration locks the courthouse door. Suddenly denied access to the courts, they wonder how this injustice can be happening to them. There but for fortune go all of us.
Paul Bland, Executive Director of Public Justice, is the people's voice, leading the fight to keep the courthouse doors open for ordinary Americans. He is one of the few people who understand that erosion of the CFPB will start quietly in the wood-paneled committee rooms of Congress. Thus last week, he observed a menacing start of that erosive effort in a simple legislative proposal by Steve Womack (AR-3) and Tom Graves (GA-14). Bland notes, "Rep. Womack’s effort to block the CFPB from acting was done without any publicity, on a party-line voice vote that no one noticed. People NEED to notice."
Bland explains that the CFPB has done extensive studies, which demonstrate how harmful forced arbitration can be. The banks want to bury that damning evidence, before the CFPB can order effective regulation to help the American consumer. The current effort is an ugly glimpse into how bank lobbying - subtle and not so subtle - strips ordinary Americans of their right to civil justice.
You can read Bland's excellent article entitled "House Republicans Scheme to Let Banks & Payday Lenders Bar Consumer Law Suits," here.