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As you should know by now, the Senate voted to roll back the CFPB’s rule banning arbitration clauses in loan documents.
It was very close and needing a simple majority required the vote of the Vice President to break a tie. That is quite telling in itself.
The Senate vote means that lenders can require a consumer to submit to binding arbitration when there are challenges made concerning their loan. This eliminates the potential for class action lawsuits. Is that really a negative for consumers?
Some say yes, others say no (it all depends on how you see the play). In the end, banks benefit as they can deal with problems on a one to one basis, limiting time, efforts, and most of all, money.
This also could benefit consumers as reducing the costs to do business; banks can reduce the costs of the loans and other services they provide.
The vote means that consumers can’t file class action suits. In the end, how much do consumers benefit from such lawsuits? Usually, the only ones making any money are the attorneys bringing the suits. Consumers get pennies on the dollar.
We could argue the point. But, what I see the vote in the Senate as more telling. In the end, most Republicans voted to repeal.
On the other hand, the Dems were in lockstep and voted across the board to save the CFPB’s ban. It seems that most recent votes have gone this way.
Could it be that almost every legislator agreed or disagreed in total along their party lines? Maybe. But, doesn’t anyone have their own opinion or position anymore? Is everything simply black or white, or should I say Republican or Democrat? That ain’t so good for the Country.
I thought politics was the art of compromise. It looks to me like it’s becoming more like follow the leader.
Some say this is a big win for the banks. Other say, not so. To move any major legislation on regulatory reform will require at least 60 votes in the Senate. That doesn’t seem likely in the present political climate. Can you say gridlock? Sad to say.
Be happy for little victories but don’t get too excited about any major changes just yet.
