Nearly every day we see another declaration by Donald Trump – mostly in 140 characters with exclamation points – that impacts the lives of Americans from California to the Carolinas.
When the Consumer Financial Protection Bureau on July 10 adopted new protections for bank customers nationwide in the aftermath of the Wells Fargo fraud scandal, Trump and Republicans in Congress vowed to kill the new consumer protection measure, if not the whole CFPB itself.
It’s a case of favoring profits over people.
The protections are designed to tame a proliferating corporate practice: Banks use “forced arbitration” to push consumers out of court and into a secretive private arbitration system tilted against the underdog.
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Hidden in the fine print of nearly every contract we sign these days, forced arbitration eliminates our constitutional right to a civil jury trial, torpedoes class action lawsuits that expose small-dollar rip-off schemes with thousands of victims, and gives god-like power to a private arbitrator typically hired by and beholden to a defendant corporation.
Despite overwhelming consumer support, the House recently passed a measure that would abolish the consumer protections and allow banks to rev up the forced arbitration industry.
It is all the more important, then, to forge a more consumer-friendly path in California. In our own backyard, Wells Fargo demonstrated how bad a big bank can be. With the moral turpitude of Russian hackers, the bank targeted customers including low-income immigrants, the elderly and college students, to create at least 2 million fraudulent accounts.
The cover-up was as bad as the crime. With disputes relegated to closed-door arbitration instead of public courts, Wells Fargo’s scheme metastasized years longer than it might have otherwise. Now Trump and Congress are doing all they can to shield such bad-actor banks from accountability.
We deserve better. Consumer Attorneys of California has joined Treasurer John Chiang and the Consumer Federation of California to back Senate Bill 33 by Sen. Bill Dodd, D-Napa. This bill ensures customers don’t give up their day in court when a bank steals their identity to create fraudulent accounts. It is a crucial step needed to guarantee that Californians remain protected.
Nancy Peverini is legislative director at Consumer Attorneys of California. She can be contacted at firstname.lastname@example.org.