WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – vowed today to fight efforts to overturn the Consumer Financial Protection Bureau’s arbitration rule. Wall Street banks and predatory payday lenders use fine print clauses known as ‘forced arbitration’ to deny consumers access to the justice system after they’ve been cheated. Notably, Wells Fargo has used forced arbitration clauses to prevent defrauded customers from taking them to court over fake accounts that were brought to light last year.
The Consumer Protection Bureau’s rule would block financial institutions from using forced arbitration and guarantee consumers the right to their day in court. More than 300 organizations that advocate for civil rights, consumers, veterans, students, and seniors have written in support of the rule.
“Almost a year after millions of fake accounts were uncovered, Wells Fargo is still using fine print arbitration clauses to cheat those customers out of the justice they deserve. Overturning the arbitration rule will help banks and payday lenders continue getting away with cheating customers, and I intend to put up one hell of a fight,” Brown said. “Wall Street banks and payday lenders have armies of lobbyists and lawyers on their sides. Our job is to fight for the servicemembers, student borrowers, seniors, and hardworking Americans who depend on the Consumer Financial Protection Bureau to look out for them.”
The arbitration rule is already under attack by President Trump’s Acting Comptroller of the Currency Keith Noreika – a former lawyer for Wells Fargo who has written two letters to the Consumer Protection Bureau’s Director Richard Cordray trying to undermine the rule. Brown wrote Noreika a letter Tuesday asking Noreika to provide documentation and analysis that supports OCC’s claims, and to explain why the OCC failed to raise any concerns during the two-years-long rulemaking process. Noreika’s response revealed that he has no evidence of a threat to safety and soundness, consistent with the position the OCC has taken during the last two years of rulemaking. House and Senate Republicans have also vowed to protect bank interests and overturn the rule through the Congressional Review Act.
Brown has urged the Consumer Protection Bureau to protect consumers’ right to be heard by a judge. He is leading legislation in the Senate that would give defrauded Wells Fargo customers their day in court.