An editorial in the Bee, “Wells Fargo needs to back bill to allow suits” (April 24), was strongly supportive of Senate Bill 33, a measure that seeks to promote class action lawsuits where trial attorneys, not consumers, are the winners.
SB 33 is not a narrowly tailored proposal. Instead, it applies to “financial institutions,” a term so broadly defined to include any business that engages in financial activities, including insurance, and which is why more than 30 wide-ranging business trade associations strongly oppose this measure.
Under this bill, arbitration would be prohibited not only if a relationship with a consumer was created fraudulently, but also if the relationship was created by unlawfully using the consumer’s personal identifying information.
We believe that this measure will prompt a wide range of claims used to defeat otherwise valid arbitration agreements. We continue to believe that arbitration is a better alternative to class action litigation that enriches trial attorneys and ultimately fails to benefit the consumer.
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The Bee also noted that this bill was even more important given that President Donald Trump recently signed an executive order that “stepped toward dismantling” the Dodd-Frank Act. In fact the order merely requested that the Treasury Department review the Dodd-Frank Act’s orderly liquidation authority and its process for designating nonbanks as systemically important financial institutions.
Our association is on record advocating for meaningful reform, not repeal, of Dodd-Frank, so that our community banks aren’t crushed by a one-size-fits-all regulatory system. Dodd-Frank has resulted in more than 20,000 pages of new regulations – why shouldn’t we pause to ensure they are having the intended impact and not negatively impacting our banking community’s ability to serve and meet the needs of their local businesses and communities?
Banks are the pillars of our communities. We support more than $130 billion of California’s economic output, employ hundreds of thousands of Californians and contribute more than $100 million to charities annually. We understand the need for and can support legislation that provides actual needed consumer protection – but not legislation that only purports to do so.
Simone Lagomarsino is president & CEO of the California Bankers Association. She can be contacted at firstname.lastname@example.org.