[Congressional Record Volume 163, Number 125 (Tuesday, July 25, 2017)]
[House]
[Pages H6268-H6278]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY BUREAU
OF CONSUMER FINANCIAL PROTECTION RELATING TO ARBITRATION AGREEMENTS
Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 468, I call
up the joint resolution (H.J. Res. 111) providing for congressional
disapproval under chapter 8 of title 5, United States Code, of the rule
submitted by Bureau of Consumer Financial Protection relating to
``Arbitration Agreements'', and ask for its immediate consideration.
[[Page H6269]]
The Clerk read the title of the joint resolution.
The SPEAKER pro tempore. Pursuant to House Resolution 468, the joint
resolution is considered read.
The text of the joint resolution is as follows:
H.J. Res. 111
Resolved by the Senate and House of Representatives of the
United States of America in Congress assembled, That Congress
disapproves the rule submitted by the Bureau of Consumer
Financial Protection relating to ``Arbitration Agreements''
(82 Fed. Reg. 33210 (July 19, 2017)), and such rule shall
have no force or effect.
The SPEAKER pro tempore. The gentleman from Texas (Mr. Hensarling)
and the gentlewoman from California (Ms. Maxine Waters) each will
control 30 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and submit
extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, hardworking Americans want something different in their
Nation's Capital. They want to change the toxic culture in Washington,
D.C., that for far too long has allowed unaccountable bureaucrats to
overreach and overregulate.
The best way we can change Washington is to begin to drain the
bureaucratic swamp, but it is not easy because we have seen in the last
6 months the swamp fights back. The most recent example of this is a
rule issued by one of the swampiest of Washington bureaucracies, the
Orwellian-named Consumer Financial Protection Bureau.
We all know that this is a rogue agency with a checkered past, chock-
full of rampant allegations of abuse, racial and gender discrimination,
and Big Government nannyism, which constantly makes credit more
expensive and less available to hardworking Americans.
Mr. Speaker, so radical is this agency and so extreme in lacking
accountability that a three-judge panel of the D.C. Circuit Court of
Appeals declared the Bureau's governing structure unconstitutional.
Now, this unaccountable bureaucracy has joined forces in an unholy
alliance with one of the Democratic Party's favorite special interest
groups; namely, the trial lawyers lobby. And this unholy alliance will
specifically deprive consumers of a low-cost, easy way to resolve legal
disputes that can be accomplished without hiring trial attorneys.
What the Bureau and the wealthy trial lawyers want is to take away
arbitration for consumers and, instead, force them into class action
lawsuits, which just so happens to require consumers to hire the very
trial lawyers who will benefit most from this rule.
Americans were promised a Consumer Financial Protection Bureau, but,
instead, they obviously got a trial lawyer enrichment bureau. Oh, by
the way, the director of this swampy bureaucracy rushed this regulation
onto the books because it is widely reported he is on the way out the
door to run for political office in Ohio.
Let's be clear, Mr. Speaker, one accountable bureaucrat has decided
that he knows better than the American people, and he has acted
unilaterally to dictate the terms of contracts in a way that will
actually increase consumer costs and reduce consumer choice. In a free
and Democratic society, no one unelected individual should possess this
much power.
Mr. Speaker, making consumers pay more for less is the exact opposite
of consumer protection, but it is exactly what this regulation means
for every American.
This regulation will perpetuate a justice gap that takes away a
quicker, less expensive legal option for low-income and middle-income
Americans.
Even the CFPB's own study says this: the Bureau's own study found
that 87 percent of the class actions it examined resulted in no
consumer benefit whatsoever. In the mere 13 percent that actually
provided some benefit, Mr. Speaker, the average payout per consumer was
$32.
How much did the trial attorneys make?
31,000 times that amount.
So, again, Mr. Speaker, we have an average payout of $32 for the
consumers and millions for the trial attorneys. So no wonder the
powerful trial attorneys lobby is so eager to see this rule go into
effect.
The Bureau's own study also concludes that arbitration is less
expensive for consumers and up to 12 times faster than litigation.
{time} 1530
Consumers who obtain relief in arbitration recovered in a CFPB study
an average of $5,389. Again, Mr. Speaker, compare that to $32 the
average consumer received under the CFPB study.
Now, we are about to hear from some Members on the other side of the
aisle that somehow consumers will lose their day in court and that
somehow big banks will be helped. The CFPB's own study shows that not a
single class action it examined, not a single one, resulted in trial by
a judge or a jury. So no consumer got his or her day in court under the
Bureau's preferred class actions. Instead, we know consumers are far
more likely to obtain decisions on the merits in arbitration.
With this rule, we once again see our colleagues in the other party
hurting small community banks and credit unions. I have a statement
that has been published already from the Independent Community Bankers
of America. They are not Wall Street. This is small town community
banks, and their statement says they strongly oppose the CFPB rule.
Also, I have a statement from the Credit Union National Association--
again, Mr. Speaker, not Wall Street, but credit unions, our
neighborhood credit unions. They say that the CFPB's rule will limit
options for resolving disputes and could increase the number of
frivolous lawsuits and that credit union members ``could suffer when
costs rise and resources are depleted as a result of this rule.''
Indeed, the CFPB, itself, estimates its final rule will increase
costs for American businesses over $1 billion per year. That is money
that our community banks and credit unions won't be able to lend to our
small businesses, to our families, and to American workers.
The CFPB's rule is bad for consumers, it is bad for community banks,
it is bad for credit unions, and it is bad for our economy. Washington
should be focused on creating more jobs, not more class action
lawsuits.
So, Mr. Speaker, it is time to fight the bureaucratic swamp. It is
time to pass the resolution offered by the gentleman from Pennsylvania
(Mr. Rothfus). I appreciate his leadership in helping protect consumers
instead of enriching trial lawyers.
Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such
time as I may consume.
Mr. Speaker, H.J. Res. 111 is an affront to hardworking Americans
across the country. Using the Congressional Review Act, this joint
resolution repeals the Consumer Financial Protection Bureau's final
rule to curb forced arbitration clauses in contracts for consumer
financial products.
Today, many banks require consumers wanting to open a bank account,
get a credit card, or take out a private student loan to enter into
forced arbitration agreements that take away their rights to
collectively sue the bank for any harm. Instead, consumers must go
through bank-friendly arbiters to resolve their grievances. These
contracts are literally buried deep into the fine print, enshrouded in
legalese. Consumers don't know what they are giving up--but the banks
do.
Arbitration proceedings, which happen behind closed doors, have no
judge and no jury. Their proceedings and their outcomes heavily favor
big businesses and Wall Street. Studies have shown that forced
arbitration favors big business and results in less compensation for
American consumers who have been abused or defrauded, if they receive
any at all.
Simply put, forced arbitration is an instrument that benefits large
corporations and Wall Street banks, and it
[[Page H6270]]
hurts consumers. For example, everybody remembers Wells Fargo. Wells
Fargo continues to use forced arbitration to prevent consumers from
working together to sue the bank for opening up millions of fraudulent
accounts using their personal information. Just weeks ago, the Consumer
Bureau used a critical rule to finally clamp down on forced arbitration
clauses. The Consumer Bureau should be applauded for taking this step
to help consumers by fully restoring their legal rights.
Once again, the Consumer Bureau has acted to make our financial
marketplaces fairer and transparent. As is their practice, the Consumer
Bureau issued this rule after careful deliberation and exhaustive
review. As part of this deliberative process, they issued a 728-page
report on the issue, considered views from all stakeholders, and
consulted carefully with the other Federal financial regulators.
The Consumer Bureau's final rule has widespread support, including
from over 310 consumer, civil rights, faith-based, and senior groups,
256 law professors and scholars, and the Military Coalition, an
organization that represents 5.5 million current and former
servicemembers and their families.
Now, this rule was just finalized, but congressional Republicans are
already shamefully forging ahead to cut it off at the knees. This
resolution wouldn't just nullify the rule, it would also prevent the
Consumer Bureau from ever issuing a rule that is ``substantially
similar.'' That means, if Republicans pass this resolution into law,
then, for the foreseeable future, consumers will be robbed of important
legal rights and generally left at the mercy of industry-friendly
auditors.
Let's be clear. There is absolutely no valid public policy rationale
for repealing this rule. It is a part of a pattern from congressional
Republicans of irrational hostility toward the Consumer Bureau and its
work and a callous disregard for the issues facing America's consumers.
But just as they have with the ``Wrong'' CHOICE Act, Republicans are
pushing an anticonsumer agenda that puts profits over people.
Enough is enough. We must hold true to a fundamental principle of our
democracy that each of us has a right to trial if we so choose. The
rule fully restores this right to American consumers by giving them a
choice between arbitration or the free exercise of their Seventh
Amendment right to a trial by jury through whatever means they choose.
So I urge all of my colleagues to vote ``no'' on this senseless and
harmful resolution, and I reserve the balance of my time.
Mr. HENSARLING. Mr. Speaker, I am pleased to yield 3 minutes to the
gentleman from Pennsylvania (Mr. Rothfus), who is the sponsor of the
legislation and vice chairman of our Financial Institutions and
Consumer Credit Subcommittee.
Mr. ROTHFUS. Mr. Speaker, I thank the chairman for yielding and for
his leadership on getting this legislation to the floor.
Mr. Speaker, the CFPB's anticonsumer, anti-arbitration, pro-trial
lawyer rule is just the latest example of the harm that can be done by
an out-of-control, Washington-knows-best bureaucracy. This is a
teaching moment for the country about how, when elites in Washington
pander to special interests, they end up hurting the very people they
claim to be protecting.
We all want fairer outcomes for consumers, but the CFPB's unfair,
deceptive, and abusive rule will deprive millions of Americans of a
convenient, fast, and effective way to resolve their disputes.
According to the CFPB's own study, only 13 percent of class actions
provided a benefit to consumers, and the average payout was--get this--
$32. How is that pro-consumer? The same study, on the other hand,
showed that consumers who obtain relief through arbitration recover
over $5,300, on average. Again, that is $5,300 in arbitration against
$32 through a class action.
Meanwhile, trial lawyers in class actions earn about $1 million, on
average. Consider that--$1 million for the plaintiffs' lawyers, a $32
coupon, $32 cash, for a consumer. In other words, trial lawyers stand
to earn 31,000 times more than a consumer in a class action.
In arbitration, however, consumers get meaningful relief. Yet the
CFPB has finalized a rule that would effectively get rid of arbitration
and promote class actions as the preferred dispute resolution process.
This hardly seems fair.
The CFPB's anti-arbitration rule is an invitation to trial lawyers to
take all they can get. Banks, credit unions, and other businesses that
American consumers interact with on a daily basis will be forced to
hold greater reserves because of the risk of future costly litigation.
This will increase costs for consumers, and it will lead to less access
or more expensive financial services for millions of Americans. It
could also harm the safety and soundness of the financial system,
according to the Comptroller of the Currency, one of the main Federal
banking regulators.
The Dodd-Frank Act requires that any move by the CFPB to regulate
arbitration agreements needs to be in the public interest and for the
protection of consumers. I fail to see how forcing consumers to accept
a coupon for their troubles and handing millions of dollars in payouts
to trial lawyers meets either of those goals.
Only at the CFPB could endangering local banks and credit unions and
restricting consumer access to financial services be cast as a win for
the American people. But, again, this is what you get from the least
accountable agency in history, an agency with, according to the D.C.
Circuit Court of Appeals, massive and unchecked power that is headed by
a Director who possesses more unilateral authority than any single
commissioner or board member in any other independent agency in the
U.S. Government.
It has long been understood that expeditious, fair resolution of
disputes is in the public interest and part of the public policy of
this country. The CFPB rule we are reviewing today challenges that
premise, as did the Dodd-Frank section that spawned this rule. But it
is the people, acting through their elected Representatives, who have
the final say in this matter.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. HENSARLING. Mr. Speaker, I yield the gentleman from Pennsylvania
an additional 30 seconds.
Mr. ROTHFUS. Mr. Speaker, I introduced H.J. Res. 111 so that Congress
can, through the Congressional Review Act, strike down this unfair,
deceptive, and abusive rule and push back against an out-of-control
agency. I ask my colleagues to support this legislation and stand for
consumers, fairness, and the American economy.
Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that the
gentleman from Missouri (Mr. Luetkemeyer) be allowed to control the
remainder of my time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1\1/2\ minutes
to the gentlewoman from New York (Mrs. Carolyn B. Maloney), who is a
senior member of the Financial Services Committee and ranking member of
the Subcommittee on Capital Markets, Securities, and Investments.
Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the ranking
member for yielding to me and for her leadership on this committee and
in so many other ways.
Mr. Speaker, I rise today in strong opposition to this resolution. My
friends on the other side of the aisle keep talking about what this
bill does, but let me tell you what it does not do.
I want to be absolutely clear that this rule does not say that
arbitration is bad for consumers, and it does not say that consumers
can't use arbitration. The only thing that the CFPB's rule says is that
financial institutions cannot force consumers to waive their right to
participate in class action lawsuits and only use arbitration. This
protects an individual customer's rights. This is critically important
because the evidence shows that consumers receive a great deal more
relief from class action litigation against institutions than they do
in arbitration.
So my friends on the other side of the aisle always say that they
believe in consumer choice and customer choice and that customers
should be able to choose what is best for them and not be dictated to
by this Congress, but mandatory arbitration clauses restrict choice
for consumers. They prohibit
[[Page H6271]]
consumers from choosing class action lawsuits over arbitration.
The SPEAKER pro tempore. The time of the gentlewoman has expired.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield the gentlewoman
an additional 10 seconds.
Mrs. CAROLYN B. MALONEY of New York. The CFPB's rule would restore
this consumer choice, further empowering people, customers, empowering
them to make their own decisions for themselves. This should be
welcomed by any American. This should be welcomed.
Mr. Speaker, I urge a ``no'' vote on this resolution.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise today in support of this resolution which would
block the Consumer Financial Protection Bureau from denying the
American people use of arbitration as a means to resolve consumer
complaints.
I went to the CFPB website last night, and the first thing I saw
read: ``We are the Consumer Financial Protection Bureau, a U.S.
Government agency that makes sure banks, lenders, and other financial
companies treat you fairly.''
If we handed out grades to government agencies based on their ability
to meet a mission statement, the CFPB would most decidedly receive an
F. That is because the Bureau's arbitration rule does absolutely
nothing to ensure that consumers are treated fairly. In fact, this rule
is proof of what House Republicans have said for years: the CFPB does
not operate in the best interests of the American consumers.
The Bureau's own study, which we have cited several times already and
will continue to cite, shows that arbitration helps consumers and that
the alternatives are far less successful.
{time} 1545
Mr. Speaker, the truth of the matter is that this rule is
anticonsumer. It hurts the very people the CFPB is supposed to protect,
and it is yet another example of Washington bureaucrats looking out for
their friends instead of the American people.
Today, this body will cast a vote to ensure U.S. consumers are
treated fairly and that they have the tools necessary to get the best
possible settlement in their case.
Mr. Speaker, if the CFPB can't adhere to a simple mission statement
and provide actual consumer protections, Congress will do it for them.
I want to again thank Chairman Hensarling and the gentleman from
Pennsylvania (Mr. Rothfus) for their leadership on this issue and so
many more issues that impact consumers.
Mr. Speaker, I ask my colleagues to support this legislation, and I
reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, the Republicans are
siding with Big Business again, against our consumers.
Mr. Speaker, I yield 1 minute to the gentlewoman from California (Ms.
Pelosi), the distinguished leader and a strong supporter of consumers
and the Consumer Financial Protection Bureau.
Ms. PELOSI. Mr. Speaker, I commend my distinguished ranking member of
the Financial Services Committee for her brilliant leadership, for her
bipartisanship, and for always trying to find a way to help America's
consumers and protect America's taxpayers.
Mr. Speaker, I am very sad today because of what is happening on both
sides of the Capitol. The cruelty, carelessness, and contempt
Republicans are showing for working families boggles the mind. Now,
Senate Republicans are careening toward shattering the healthcare of
millions of Americans, with no regard or appreciation for the
consequence.
Every chance they get, they stack the deck against America's working
families. Here, on this side of the Capitol, Republicans are stacking
the deck even further against America's working families by seeking to
deny those families their fundamental right to obtain justice in court.
Eight years ago, unchecked recklessness on Wall Street ignited a
financial meltdown that devastated families across the country.
Democrats proudly took bold action and passed Dodd-Frank, the strongest
set of consumer financial protections in history. But today, House
Republicans are once again trying to destroy those protections for
America's consumers.
Last month, Republicans passed what we called the ``Wrong'' CHOICE
Act, the Dodd-Frank repeal, which was a giveaway to the financial
industry at the expense of hardworking families.
Republicans are waging a war on the Consumer Financial Protection
Bureau, a bureau that has returned nearly $12 billion to 29 million
wronged Americans, many of them seniors, veterans, and members of the
Armed Forces.
Forcing consumers into arbitration--indeed, forced arbitration--gives
financial services providers a free pass to get away with abuse. It
denies, again, veterans, servicemembers, and seniors justice against
the predatory financial marketplace practices. Sadly, it reflects a
Republican Party that works relentlessly to empower Wall Street and to
rig the system against consumers. It denies them consumer class action.
More than 800 years ago, the Magna Carta first laid out a basic right
to justice as the foundation of a fair society. Even under a king, the
Magna Carta declared, this much was owed the people: ``. . . to no one
will we deny or delay right or justice.''
Every day, Americans take a similar solemn pledge: ``liberty and
justice for all.'' Republicans' attack on consumers insult those
pledges and deny Americans their justice.
All the American people deserve a better deal than what they are
getting from the Republicans in Congress. Democrats are going to fight
back. We will fight to protect hardworking American consumers. We will
fight to put leverage back into the hands of the American people.
Who has the leverage? If I am a financial institution and I know that
you have no leverage, that you cannot act in a class action way, you
can just imagine what I have in store for you. But if I think you have
leverage and you can act in a different way and not be forced into
arbitration, I might have more respect for our financial relationship
with each other.
We will put the leverage back in the hands of the American people. We
will fight this resolution. I call upon my Republican colleagues to
join Democrats in voting ``no'' because this bill is an unfair and
unjust bill.
Who is it unfair to? America's working families, America's consumers,
and America's taxpayers.
I urge a ``no'' vote.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Huizenga), chairman of the Capital Markets, Securities,
and Investments Subcommittee.
Mr. HUIZENGA. Mr. Speaker, let's talk about a stacked deck: trial
attorneys putting cash over conscience. That is not the answer that we
are in search of, but it is the answer that others who are opposed to
this certainly are.
The CFPB, the so-called Consumer Financial Protection Bureau, has a
study itself that shows that consumers who actually use arbitration
reach more favorable outcomes than those who are roped into lawsuits
with cash-starved trial lawyers.
It is astounding that only 13 percent of these lawsuits provide any
benefit to actual consumers, but the Bureau is still pushing this ill-
advised rule. Arbitration decisions also come much more quickly for
consumers. Again, the Bureau's own study concludes that arbitration
decisions come 12 times faster than lawsuits.
So let's review quickly: a faster, more favorable outcome for
consumers versus helping trial lawyers line their pockets. This should
not be hard.
In fact, Mr. Speaker, according to the D.C. Circuit Court, unelected
Bureau Director Cordray has more unilateral authority than any other
single commissioner or board member in any other independent agency in
the entire U.S. Government.
Congress must begin to use its authority to hold this agency
accountable for its anticonsumer policies and actually provide the
checks and balances that our Founders would have intended. That is the
stacked deck that we have right now, folks.
The Bureau's flawed arbitration rule does absolutely nothing to
protect the consumers it is charged with protecting. Instead, it is
nothing more than a windfall for trial lawyers and well-connected
Washington elites. The
[[Page H6272]]
rule's only accomplishment will be to create more class action
lawsuits, lining trial lawyers' pockets with more cash while providing
no real protection to consumers.
This anticonsumer rule will have the effect of making consumers wait
longer for worse decisions as they seek resolutions for their disputes.
In no way, shape, or form does this rule actually do what the Bureau
was created to do: protect consumers.
This CRA is an important step in allowing Congress to rein in this
rogue agency. I urge my colleagues to support this resolution.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentlewoman from New York (Ms. Velazquez), a senior member of the
Financial Services Committee and ranking member of the Small Business
Committee.
Ms. VELAZQUEZ. Mr. Speaker, I thank the ranking member for yielding.
Mr. Speaker, the right to seek redress in the courts is one of the
most fundamental rights we have as Americans. Unfortunately, companies
routinely try to undermine this right by including mandatory
arbitration clauses in contracts we use every day, including credit
cards, student loans, auto loans, and cell phones.
These clauses often state that a consumer must resolve a dispute they
are having with a third party often chosen by the company at a location
that is chosen by the company. Companies also use these clauses to
block class action lawsuits brought by consumers.
Now, once again, thanks to the CFPB, contracts that have these
clauses will no longer be permitted to prohibit consumers from banding
together or joining a class action. This rule helps hold companies
accountable and protects consumers. That is why more than 280 consumer,
civil rights, labor, community, and nonprofit organizations support
this rule. That is also why unscrupulous firms are lobbying so
aggressively to block this rule.
Stand up for consumers. Vote ``no'' on this joint resolution.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the gentleman from
Kentucky (Mr. Barr), chairman of the Financial Services Monetary Policy
and Trade Subcommittee.
Mr. BARR. Mr. Speaker, make no mistake: the anti-arbitration rule
recently finalized by the Consumer Financial Protection Bureau is not
consumer protection. It is a giveaway to special interest trial lawyers
that will expose financial firms to ruinous liability; limit consumer
access to affordable, high-quality financial services and products; and
undermine consumers' ability to resolve disputes more quickly and more
cost-effectively than class action lawsuits.
The Bureau's own study found that, while trial lawyers earn millions
of dollars in fees, in 90 percent of class action lawsuits, consumers
were awarded absolutely nothing--nothing. Of the remaining 10 percent,
the average payout to consumers was a mere $32. That same CFPB study
found that the average arbitration payout was almost $5,400, or over
150 times more than the average class action recovery.
Even more troubling, the Bureau's unilateral decision to ban
alternative dispute resolution will result in increased litigation
costs for financial services firms, undermining their safety and
soundness, forcing consumers to pay higher prices and making it more
difficult to obtain credit cards and other financial services and
products. That is not pro-consumer.
For these reasons, I am a proud cosponsor of Congressman Rothfus'
bill that would disapprove this misguided resolution to the
Congressional Review Act.
Congress should be making the laws of the land, not unaccountable,
unelected bureaucrats at the CFPB circumventing the democratic process.
That is why, in addition to invalidating this bad anticonsumer, pro-
trial lawyer, anti-arbitration rule, Congress must act swiftly to rein
in the Bureau and subject this agency to the congressional
appropriations process, reclaiming Congress' constitutional power of
the purse over this out-of-control agency.
I urge my colleagues to vote ``yes'' on this resolution of
disapproval to block this ill-advised, anticonsumer rule and reclaim
its authority under Article I of the Constitution.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to
the gentleman from Minnesota (Mr. Ellison), a leading member on this
consumer issue.
Mr. ELLISON. Mr. Speaker, if you listen to my friends on the other
side of the aisle, they are going to tell you that having access to a
lawyer in a court is a bad thing, but it is the foundation of American
justice. The foundation of American justice is that, if somebody rips
you off, you can sue them in court.
These arbitration clauses are the fine print, Mr. Speaker, that you
find in these contracts that say, if you have a dispute with this
particular company, you can only go to arbitration. And these
arbitrators are almost always picked by the company themselves.
The fact is this is not justice. It is a railroad court. It is not a
real court, and consumers are less well off. That is why over 100,000
individual consumers across the country wrote in to support the rule
during the public comment period.
If my friends on the other side of the aisle are right, how come they
don't have 100,000 people saying that their position is correct?
The people have spoken. They have engaged in the comment period and
said: We want to be able to go to court to hold these people
accountable.
Wells Fargo ripped off literally hundreds of thousands of Americans.
In 2 million transactions, they opened up accounts people never asked
for.
If you sue them, you might just be limited to an arbitration clause,
which limits your award, and they pick the judge. Why not be able to
join with other Americans and sue in court the good, old-fashioned way:
get some discovery, get some money back, get some justice? This is what
it is all about.
We believe that the American people deserve to take them to court if
they take your money and rip you off. That is what we are standing up
for today.
This is nothing but a U.S. Chamber, Big Business giveaway that they
are talking about. We stand on the side of American consumers. American
consumers want to take them to court.
{time} 1600
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Colorado (Mr. Tipton), vice chairman of the Oversight
and Investigations Subcommittee.
Mr. TIPTON. Mr. Speaker, this resolution of disapproval will repeal
the CFPB's Arbitration Agreements rule, a rule that consumers are going
to be able to be protected by, according to the CFPB. That is their
stated mission: to protect the consumers.
Let us look at the data that has been provided by the CFPB. Just 13
percent of the class action suits actually provided a benefit to the
consumers. And what was that whopping benefit? Thirty-two dollars.
Thirty-two dollars that they are willing to celebrate over as
compensation for people who have been harmed.
Let us look at the other side of the ledger. What are trial lawyers
receiving? On average, $1 million. So while our friends may want to
stand up for the trial lawyers, for their million-dollar paychecks, we
are going to choose to stand with the American consumer to make sure
that they are going to be able to receive the justice that they
deserve, and one way to be able to do that is going to be through
arbitration.
When we look at the CFPB's own statistics, the average arbitration
payout is not your $32. It is almost $5,400, which has been received in
terms of compensation that is going to be paid.
This latest rule, Mr. Speaker, joins a growing list of CFPB actions
that have hurt consumers. Since the Bureau's inception, they have
rolled out rules and regulations 3\1/2\ times faster than other Federal
agencies, and according to the research from the American Action Forum,
just 26 of these regulations have added an additional $2.8 billion in
regulatory costs.
The practical effect of the Bureau's actions are measurable,
especially in rural districts like mine: no mortgage credit for young
families trying to purchase their first home, community banks that
spend more time on compliance than serving their community, and small
businesses that cannot get the capital that they need to grow.
The Arbitration Agreements rule is nothing more than the latest
sleight-
[[Page H6273]]
of-hand by the Bureau taking money out of pockets of consumers and
gifting it to trial lawyers.
The SPEAKER pro tempore (Mr. Valadao). The time of the gentleman has
expired.
Mr. LUETKEMEYER. Mr. Speaker, I yield an additional 30 seconds to the
gentleman.
Mr. TIPTON. Mr. Speaker, the CFPB would lead you to believe that a
multiyear class action lawsuit--and that is according to the CFPB's own
estimates, average attorneys' fees of $388 million, and that is a win
for consumers.
The judgment is not on the side of consumers. They may want to stand
for the trial lawyers. We are going to stand for the consumers. Let's
repeal this and institute the CRA for the arbitration rule.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Massachusetts (Mr. Capuano), a senior member of the
Financial Services Committee and a strong progressive member.
Mr. CAPUANO. Mr. Speaker, I thank the gentlewoman for yielding.
Let us be honest. There are no legitimate consumer groups who support
repealing this rule. The consumer groups are actually with the
consumers, and they want this rule.
So let us be clear. This rule is being repealed for the biggest
financial institutions in the country.
Let us be clear. I do not oppose arbitration as an option. I do
oppose it as the only alternative allowed. Very simply, you go to a
bank, they open up a bank account in your name, they steal your money,
they move it over. If you catch them, you go to the bank, you file
arbitration, they give you your $100 back and maybe a dollar's worth of
interest, and it is over.
They don't tell you there is 2 million, 3 million, 5 million other
people with the same situation who don't know about it. Because it is
arbitration, no one talks about it. It is done in private.
I am not opposed to arbitration as a way to avoid court when
possible. I am vehemently opposed to taking options away from consumers
that say you cannot individually stand for your rights. That is what
this bill does. That is all it does.
If you care about consumers, you would work with us to try to find a
simpler way. You don't want to do it. You want to help the big boys.
Good luck.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Texas (Mr. Williams), the vice chairman of the Monetary
Policy and Trade Subcommittee.
Mr. WILLIAMS. Mr. Speaker, a few weeks ago, the Consumer Financial
Protection Bureau implemented their most recent arbitration rule. While
this rule claims consumer protection, it does the very opposite. It
will cost Americans more of their hard-earned money and time.
The CFPB is arguably the most powerful and yet unaccountable
government agency in the history of this country. By intentional
design, the CFPB is not accountable to Congress or the taxpayer.
According to the D.C. Circuit, the unelected CFPB Director, Richard
Cordray, ``possesses more unilateral authority than any single
commissioner or board member in any other independent agency in the
U.S. Government.''
What does this mean exactly? Well, it means that no one is checking
the Director's actions. The CFPB is able to evade all limits and
restraints proposed by the government. Because of this, Director
Cordray is only looking out for one person--that is himself.
The CFPB chose to ignore their own study because the results did not
fit the narrative they were trying to impose on Americans. This study
showed that the average consumer receives $5,400--we have heard this
already--in cash relief when using arbitration, as opposed to an
inadequate $32 through class action suits.
In addition, the study concluded that the use of arbitration produced
a higher recovery rate and shorter timeline for the consumer, and that
is good. Regardless of this study, Director Cordray has refused to
acknowledge that taxpayers will feel the immediate damage that comes
from limiting their options by being forced to pay more for less.
Bottom line, this is just another example of overregulation by the
CFPB taking away the option of arbitration that will hurt all
Americans.
As a small business owner, I have gone both ways. Arbitration wins
every single time for those involved. It is called fairness.
Mr. Speaker, I commend Representative Keith Rothfus for leading the
way on this much-needed CRA. I encourage all my colleagues to join us
in repealing this harmful rule and ensuring the Bureau is not able to
issue any similar rule relating to arbitration.
In God We Trust.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from California (Mr. Sherman), a senior member of the
Financial Services Committee and Foreign Affairs Committee.
Mr. SHERMAN. Mr. Speaker, which is more fraudulent? On the one hand,
we have Wells Fargo, 3 million phony accounts, and then they use their
forced arbitration provision to tell people that if you signed up for a
legitimate account and there was some language in there that created
arbitration, that it even applies to the phony accounts.
Well, what is even more fraudulent? The supporters of this bill who
say that the rule deprives people of the option of arbitration. It
hardly does that. It simply prohibits forced arbitration.
But more important are the numbers. Arbitration is typically used by
someone with a $50,000 claim. Class action lawsuits, it is 50,000
people with a $32 claim. So then they say: Well, arbitration provides
more. Of course it provides more. Because the average person in the
pool has got a $50,000 claim, and class action only produces $32
because it is designed for a situation where you have a million
plaintiffs or a half a million plaintiffs each with a $32 claim.
You cannot compare the two except to say that arbitration is
unavailable to anyone with a claim of less than $1,000.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the distinguished
gentlewoman from New York (Ms. Tenney), a member of the Financial
Services Committee.
Ms. TENNEY. Mr. Speaker, I rise in support of H.J. Res. 111.
Mr. Speaker, the Consumer Financial Protection Bureau finalized a
rule forbidding financial service firms from including a mandatory
arbitration clause in contracts with consumers. The rule is not only
bad for consumers, it highlights the need for accountability in
Washington.
Unelected bureaucrats wield too much power with too little oversight,
and this rule would force consumer class actions and eliminate
arbitration options. As an attorney, I know that many class action
lawsuits are all too often more about cash for plaintiffs' trial
lawyers than protection for consumers. In fact, the CFPB's own study
even admitted that arbitration is faster, less expensive, and pays out
consumers much higher compared to the class action lawsuit.
Of course, many trial lawyers oppose arbitration because it denies
them of exorbitant class action lawsuit fees. It is an inexpensive
alternative to courtroom litigation.
If consumers are lucky enough to be part of the successful class
action, the average individual payment is, as my colleague just pointed
out, only about $32. Remarkably, the trial lawyers raked in $425
million in class action fees between 2010 and 2013, according to a
study by Forbes.
Of the arbitrations reviewed by the CFPB in which consumers were
victorious, the average individual payout was $5,389. Why would the
Consumer Financial Protection Bureau want to take a fair and elective
alternative for resolving disputes away from consumers when they
benefit from them?
The consumers have the option to do as they please, but I believe the
CFPB's antiarbitration rule would do nothing but harm consumers, line
the pocket of trial lawyers, and literally take money out of the hands
of consumers.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Illinois (Mr. Foster), a member of the Financial
Services Committee.
Mr. FOSTER. Mr. Speaker, I urge my colleagues to vote ``no'' on H.J.
Res. 111 to block the Consumer Financial Protection Bureau's
arbitration rule.
[[Page H6274]]
The CFPB is charged with protecting consumers from unfair and abusive
behaviors by banks and financial firms. To that end, the CFPB's rules
would prohibit provisions requiring that a bank customer surrender the
right to participate in class actions.
This practice undermines a consumer's right to be compensated for
damages, particularly when they get nickeled and dimed by the fine
print in financial contracts.
Class actions often represent the only realistic option for consumers
who are ripped off to the tune of a few dozen or a few hundred dollars,
and they reduce the burden on the courts by consolidating claims,
thereby saving money for both plaintiffs and defendants.
Opponents of the CFPB's rule hope that, by prohibiting the
consolidation of claims, they can make potential damages so small that
the individual claims are not viable.
Meritorious claims from aggrieved plaintiffs who have suffered actual
damages would go uncompensated, and equally importantly, wrongdoers
would go unpunished.
I urge my colleagues to stand up for consumers and ensure that they
can be fairly compensated by actual damages and wrongdoers punished.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Michigan (Mr. Trott), a member of the Financial Services
Committee.
Mr. TROTT. Mr. Speaker, I rise in support of H.J. Res. 111, which
will block the CFPB's harmful arbitration rule.
I want to start with a little story. Last year, I opened up the mail,
and I got a wonderful surprise. I got a check for $3.92. Apparently, I
was part of some class action lawsuit, didn't know it, dug into the
facts, didn't feel I had been harmed, didn't know who the attorneys
were, but I got $3.92, almost enough to buy a latte. I did a little
digging around and turns out the lawyers representing the plaintiff
class made millions of dollars.
Now, we have heard a lot of conflicting stories here today about this
bill being harmful to consumers. Here are the facts.
In a class action lawsuit, a typical consumer gets $32; in
arbitration, a typical consumer gets $5,400; in a class action lawsuit,
it takes 12 times longer for the consumer to get the money.
But how can this be? Well, in my prior life, I represented a lot of
clients who were involved in class action lawsuits. Here is your
typical class action lawsuit.
It involves a highly technical violation, not the Wells Fargo
example, where there is little or no harm to the consumer, goes on for
years, costs millions of dollars in legal fees, and at the end of the
day, there is a settlement for $3.92.
I will make a deal with my friends on the other side of the aisle. I
will buy anyone a latte who comes clean with the American people and
tells them why they are opposing this bill.
The reason why they are opposing this bill is the Trial Lawyers
Association makes millions of dollars, and that money lines the pockets
of their campaign coffers. It is not about consumers. It is about
lawyers protecting lawyers, and it is about protecting the bureaucrats
in the swamp.
I ask all my colleagues to join me in supporting this joint
resolution.
Ms. MAXINE WATERS of California. Mr. Speaker, I am sick and tired of
my colleagues on the opposite side of the aisle talking about this $32.
Republicans keep discussing that consumers get $32 in class action,
but they ignore how few consumers win in arbitration. Big banks win
93.1 percent of the time in arbitration. The deck is stacked against
consumers, not Wall Street.
Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr.
Johnson), a leading member on this consumer arbitration issue.
Mr. JOHNSON of Georgia. Mr. Speaker, I thank the Congresswoman, and I
rise in strong support for the Consumer Financial Protection Bureau on
the important topic of forced arbitration.
I urge my colleagues to vote ``no'' on H.J. Res. 111. Forced
arbitration is a modern twist to an old trick, tricking people out of
their day in court. Forced arbitration tricks people out of their
constitutional right to a jury trial on their claim against corporate
special interests. Forced arbitration prohibits consumers from taking
their case to court for a jury trial and forces the consumer into the
back room with a secret arbitrator selected by the corporation who then
decides the case for the corporation. It doesn't take a genius to know
what happens when you get behind those closed doors.
The outcome will be against the consumer. It is not fair; it is not
right; and it is not justice.
{time} 1615
Corporate special interests trick consumers into giving up their
rights to a jury trial by hiding forced arbitration clauses in the fine
print of consumer agreements that they require consumers to accept when
there is no other choice.
Consider the latest example from Wells Fargo, which was caught red-
handed engaging in unscrupulous banking practices to the detriment of
their customers. They were ruining the credit of their customers by
opening millions of fake accounts in the names of their unsuspecting
customers.
When Wells Fargo got caught, their customers were barred from going
to court because they had unknowingly agreed to the forced arbitration.
If this is not adding insult to injury, I don't know what is.
Congress authorized CFPB to consider banning or limiting forced
arbitration in cases of consumer financial products or services. The
CFPB found that forced arbitration clauses denied consumers the ability
to obtain justice. That is why Congress should vote in approval of the
rule for the CFPB and reject H.J. Res. 111.
Mr. LUETKEMEYER. Mr. Speaker, how much time is remaining on each
side?
The SPEAKER pro tempore. The gentleman from Missouri has 6 minutes
remaining. The gentlewoman from California has 13\3/4\ minutes
remaining.
Mr. LUETKEMEYER. Mr. Speaker, I yield 2 minutes to the gentleman from
Georgia (Mr. Loudermilk), a member of the Financial Services Committee.
Mr. LOUDERMILK. Mr. Speaker, I thank the gentleman for yielding to
me.
Mr. Speaker, Ronald Reagan had a unique gift of communicating in a
way that reflected the ideas and the thoughts of the American people.
He also understood that out-of-control government bureaucracy had a
well-deserved reputation of working in its own best interest, not in
the best interest of the American people.
President Reagan best defined this mistrust of government when he
stated: ``The most terrifying words in the English language are: I'm
from the government and I'm here to help.''
The skepticism Americans have of their too-big-to-be-useful
government has only increased since Reagan spoke those words. And it is
rules and regulations, such as the one we are discussing here today,
that fosters the distrust Americans have of their government. The
CFPB's decision to ban arbitration with preference to class action
lawsuits will cause harm to both consumers and businesses.
Arbitration has proven to be an effective tool that benefits both
parties in a dispute, and has shown to be more favorable to consumers
than traditional litigation in the courts. The average compensation, as
you have heard, to consumers when using arbitration is $5,400. In
contrast, the average settlement for consumers in a class action
lawsuit is $32.
Not only is arbitration more financially beneficial to consumers, it
is less costly and less time-consuming than fighting through the
courts. Disputes which use arbitration are usually settled in 2 to 7
months; however, lawsuits can take an average of 2 years to settle.
Even the CFPB has recognized that arbitration is more efficient, less
costly, and more beneficial to consumers; so it boggles the mind trying
to figure out why they are pursuing a course that would harm Americans.
It is the responsibility of Congress to rein in government when it is
outside the constitutional boundaries of its office or pursues a course
of action that is harmful to the citizens. In this case, the CFPB is in
violation of both of these principles.
I support this legislation that would roll back the CFPB's ban on
arbitration.
[[Page H6275]]
Again, I thank the chairman for the time, and I thank the gentleman
from Pennsylvania (Mr. Rothfus) for sponsoring this bill.
Ms. MAXINE WATERS of California. Mr. Speaker, my colleagues on the
opposite side of the aisle hate Mr. Cordray so much because he has been
so effective, returning $12 billion to consumers, that they would harm
the American public rather than admit that they are wrong.
Mr. Speaker, I yield 2 minutes to the gentleman from Virginia (Mr.
Scott), the ranking member of the Committee on Education and the
Workforce.
Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentlewoman for
yielding.
Mr. Speaker, I rise in opposition of H.J. Res. 111, which will
overturn the Consumer Financial Protection Bureau's rule, prohibiting
forced arbitration for many consumer contracts, including student loan
contracts.
Banks and large corporations often take advantage of ordinary
Americans by burying forced arbitration clauses and boiler plate fine
print in standard contracts.
When corporations force consumers to secretly arbitrate with
handpicked firms, which rely on those same corporations for repeat
business, the system is rigged.
Take, for example, Matthew, who enrolled in a for-profit aviation
school that closed before Matthew could finish his degree. At the
recommendation of the school, he had taken out $56,000 in private
student loans.
With debt and no credential because the school had closed, Matthew
joined a class action with thousands of other students. But due to a
class action ban in the loan contract, the court ruled that thousands
of individual students must individually settle their disputes with the
bank in arbitration.
That means each individual student had to hire their own lawyer, take
time off to present their case, and everything else you have to do to
present a case. That is why most victims of this kind of fraud will
never collect what they are owed.
If each victim only loses a little bit, virtually nobody will bring a
claim. With the class action, at least you can achieve an injunction so
the corporation will stop. Each plaintiff might receive a little bit,
but without the class action, the corporation is free to continue the
fraud.
Without this rule, the banks will continue to use forced arbitration
clauses to advance their special interests at the expense of innocent
victims who will be ripped off.
Mr. Speaker, that is why we need to stand with consumers. I urge my
colleagues to do that: stand with consumers, reject this repeal of the
important rule, and vote ``no'' on H.J. Res. 111.
Mr. LUETKEMEYER. Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to
the gentleman from Rhode Island (Mr. Cicilline), the ranking member on
the Subcommittee on Regulatory Reform, Commercial and Antitrust Law.
Mr. CICILLINE. Mr. Speaker, I thank the gentlewoman for yielding to
me.
Mr. Speaker, I rise in strong opposition to H.J. Res. 111, which
would repeal protections for our men and women in uniform and other
everyday consumers against the use of forced arbitration by megabanks
and other financial service providers.
Earlier this month, the CFPB finalized strong rules to protect the
rights of hardworking Americans to band together in our justice system
to hold corporate wrongdoers accountable. This protection is
particularly critical for our Nation's men and women in uniform and
their loved ones.
For over a decade, under both Democratic and Republican
administrations, the Defense Department has warned Congress about the
effects of forced arbitration in servicemembers' contracts. Often
buried in the fine print of financial contracts, these clauses waive
the rights of veterans and servicemembers to a day in court before a
dispute even arises.
If these arbitration provisions were so beneficial to consumers and
to servicemen and -women, why do you have to sneak these mandatory
provisions into the contract?
There is overwhelming support for this rule among military service
organizations who agree that forced arbitration clauses block access to
the justice system and funnel the claims of servicemembers into
private, costly arbitration systems.
Since the Second World War, Congress has continuously expanded and
strengthened the rights and protections for servicemembers and veterans
out of a sense of obligation that we must honor and protect our men and
women in uniform. But this resolution would end vital financial
protections for those who have sacrificed so much in service to our
country and the fundamental idea that we are a nation of laws and
institutions that guarantee the rights and prosperity of every
American.
Mr. Speaker, I urge my colleagues to oppose this resolution, to
preserve this rule, to stand up for the men and women in uniform, to
stand up for the American consumer, and to stop being errand boys for
the megabanks.
Mr. LUETKEMEYER. Mr. Speaker, I continue to reserve the balance of my
time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Maryland (Mr. Sarbanes), the leader of the Democracy
Reform Task Force.
Mr. SARBANES. Mr. Speaker, I thank the gentlewoman for yielding to
me.
Mr. Speaker, here we are again: the special interests are running the
show in Washington. Pointblank, this resolution will make it harder for
Americans to get justice. Specifically, this will unwind critical new
rules that allow financial consumers to take collective action. You
heard that right. This is an effort to take away your ability to sue
big banks when they run you over. Instead, the majority wants to force
you into unfair, bureaucratic arbitration processes that severely
disadvantage you in favor of the Wall Street firms.
I always ask the same question when the Republicans bring these
measures up here to gut consumer protections: Who back home is asking
for this? Who is coming to the townhalls and begging to repeal this
rule? Who is asking you to make it harder to seek damages when someone
is being harmed by a big bank?
Nobody is asking for this. In fact, as Keith Ellison said a few
minutes ago, there are 100,000 people who are beseeching us to support
this rule to protect them out there. Nobody is asking to repeal this
rule or shut this rule down.
I know who wants it here in Washington. It is the big money special
interests, the so-called swamp. We can't let this happen. The American
people should be furious.
Mr. Speaker, I urge my colleagues to oppose this reckless, shameful
effort.
Mr. LUETKEMEYER. Mr. Speaker, I yield 1 minute to the gentleman from
Tennessee (Mr. Kustoff).
Mr. KUSTOFF of Tennessee. Mr. Speaker, I rise today in support of
H.J. Res. 111, which uses the Congressional Review Act to disapprove
and nullify the rule issued by the CFPB on July 10, 2017.
Time and time again, we have seen the CFPB abuse their power and
authority to unilaterally issue rules without seeking any input from
Congress.
Since its establishment, the CFPB has displayed complete disregard
for due process, as it has issued enforcement actions against companies
that are unjustly accused of wrongdoing.
Frankly, the CFPB's recent antiarbitration rule is no different. This
rule would change the ability for consumers to resolve disputes with
financial services companies through arbitration, which has
consistently provided consumers with expedient, efficient, and less
costly resolutions.
In short, making consumers pay more for less is the exact opposite of
consumer protection, and is the reason we need to reject this harmful
rule.
I applaud the work of Chairman Hensarling and the other members of
this committee on this work to hold the CFPB accountable.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentlewoman from California (Mrs. Davis), the ranking member of the
Higher Education and Workforce Training Subcommittee.
Mrs. DAVIS of California. Mr. Speaker, as representatives of the
people, our job is to protect working families. So let's be clear, we
should be protecting
[[Page H6276]]
consumers, including members of our military who sacrifice so much for
us.
When a predatory lender forces arbitration, it puts consumers into a
system where their grievances don't get the fair treatment of a court.
Instead, a law firm handpicked by the corporation will decide the
outcome, putting the consumer at an extreme disadvantage from the
start.
The CFPB issued a long, overdue role to prohibit this unfair practice
that benefits wealthy special interests at the expense of the American
people.
So why would we take a step back?
Even worse, these predatory lenders often prey on our military, so we
should be protecting our military to have transparent and just legal
options. Forced arbitration is just the opposite.
Mr. Speaker, we need a process that works for consumers. This
resolution will only bring us back to a broken system.
Mr. Speaker, I urge my colleagues to join me in striking down this
resolution.
Mr. LUETKEMEYER. Mr. Speaker, how much time is remaining on each
side?
The SPEAKER pro tempore. The gentleman from Missouri has 3 minutes
remaining. The gentlewoman from California has 7\1/2\ minutes
remaining.
Mr. LUETKEMEYER. Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from California (Mr. Takano), the vice ranking member of the
Veterans' Affairs Committee.
Mr. TAKANO. Mr. Speaker, I rise today to strongly oppose this CRA
opposition, which rolls back critical protections for American
consumers.
Passing this resolution would set a nearly irreversible policy that
allows Wall Street companies to commit pervasive fraud while avoiding
the accountability that comes with a class action lawsuit.
Access to our courts and the transparency and fairness they provide
is a fundamental right enshrined in our Constitution. It is a sad irony
that many of those that would be denied their constitutional rights
through this resolution are the servicemembers and veterans who have
risked their lives to protect those rights.
When the American consumer takes on a Wall Street corporation, it is
already a David versus Goliath situation. Now Republicans want to steal
David's slingshot. Mr. Speaker, don't let them steal David's slingshot.
Don't let them steal America's slingshot.
Mr. Speaker, I strongly encourage my colleagues to reject this
resolution.
Mr. LUETKEMEYER. Mr. Speaker, I continue to reserve the balance of my
time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentlewoman from Oregon (Ms. Bonamici), a senior member on the
Committee on Education and the Workforce.
{time} 1630
Ms. BONAMICI. Mr. Speaker, I thank the ranking member for yielding.
Mr. Speaker, I rise today in strong opposition to H.J. Res. 111, a
resolution that will undermine the Consumer Financial Protection Bureau
and allow financial institutions to continue taking advantage of
consumers.
The CFPB's arbitration rule protects consumers, including students,
servicemembers, and seniors, by allowing them access to justice in
court and to participate in class action lawsuits against unscrupulous
financial institutions.
I am a former consumer protection lawyer. I have no problem with
arbitration clauses when they are agreed to by parties with equal
bargaining power, but we have seen what happens when institutions
include nonnegotiable forced arbitration clauses in the fine print of
consumer contracts.
Private student loan providers, payday lenders, credit card
companies, and banks have consumers sign away their rights to access
the court system when they are cheated. The CFPB rule will address that
inequity and provide consumers with a remedy.
We must reject this effort to roll back consumer protections and
allow the CFPB to continue to do their important work. Please vote
``no.''
Mr. LUETKEMEYER. Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Virginia (Mr. McEachin), a member of the House Armed
Services Committee.
Mr. McEACHIN. Mr. Speaker, I thank the gentlewoman for yielding.
Mr. Speaker, I rise to oppose this resolution, which would stack the
deck against hardworking families, small businesses, and nearly any
group or individual who needs financial services.
Mr. Speaker, universal access to fair and impartial courts is a
principle that is enshrined in both the Sixth and Seventh Amendments of
our Constitution. It is the cornerstone of our justice system. Without
that access, we cannot hold bad actors accountable; families and small
businesses suffer; justice is denied.
Forced arbitration clauses protect the powerful by denying Americans
their day in court. Big corporations have enormous leverage. They offer
essential services and have few competitors.
For many consumers, having a cell phone or a checking account means
accepting arbitration. Often there are no other options.
The CFPB has sought to correct that injustice. The Bureau's
arbitration rule ensures that those who are wronged by a financial
institution have meaningful recourse. At Wells Fargo and elsewhere,
recent events have shown why that recourse is essential.
When our courts are out of the picture, accountability can slip;
cutting corners becomes less risky and more attractive.
Mr. Speaker, I ask my colleagues to oppose this resolution.
Mr. LUETKEMEYER. Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Pennsylvania (Mr. Cartwright), a member of the Committee
on Appropriations and the Committee on Oversight and Government Reform.
Mr. CARTWRIGHT. Mr. Speaker, I thank the gentlewoman for yielding.
Mr. Speaker, there is one thing about us Americans that separates us
from the rest of the world: we have a Bill of Rights in this country,
and it includes the Seventh Amendment, and my colleague, Mr. McEachin,
just mentioned it, the Seventh Amendment: the right of trial by jury
shall be preserved. It is what makes us Americans.
And watch out. When you hear them attacking legal fees and lawyers
making money, that means they are attacking your rights. They are
trying to take them away.
For too long, big banks have gotten away with taking advantage of
their customers, from fake accounts to subprime mortgages. American
consumers have suffered a great deal of harm at the hands of Wall
Street, and now we have a rule that will help consumers fight back. It
is a rule from the Consumer Bureau that fixes a flaw in the judicial
system that keeps victims from accessing justice by banding together
with class actions.
Don't let them take your rights away. Let's fight this resolution.
Mr. LUETKEMEYER. Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I yield 1 minute to the
gentleman from Massachusetts (Mr. Capuano), a Member who is outraged by
the attack on consumers by the opposite side of the aisle.
Mr. CAPUANO. Mr. Speaker, I am glad to be outraged on this one.
About a month ago, the majority party took away the ability of people
using the internet to keep their information private. You allowed every
person on the internet, every company, to access everything about
anybody who uses the internet. The country hated it. During that entire
debate, you told America: We are out to protect you; we are protecting
you.
No one believed it, and here we are again today. You are out to
protect the consumers, with no consumer groups who agree with you. You
are basically telling people: Trust us more than you trust yourselves;
therefore, in order to do that, we will take away your right to protect
yourself in a court of law.
No one buys it. No one buys it. Leave us alone. Let me defend myself.
I don't need you to defend me. America wants to be left alone. Leave
them alone.
The SPEAKER pro tempore. Members are reminded to direct their remarks
to the Chair.
Mr. LUETKEMEYER. Mr. Speaker, that is what arbitration is all about,
to allow the individual to defend himself.
[[Page H6277]]
Mr. Speaker, I reserve the balance of my time.
Ms. MAXINE WATERS of California. Mr. Speaker, I am now prepared to
close, and I yield myself the balance of my time.
Mr. Speaker, today we have heard Democrats speak about the importance
of the Consumer Financial Protection Bureau's rule to stop forced
arbitration clauses in contracts for consumer financial products and
the harm that would result from this joint resolution to repeal the
rule.
Forced arbitration clauses severely limit consumers' legal rights and
prevent groups of consumers from holding financial institutions
accountable for wrongdoing. The Consumer Bureau's rule helps to ensure
that financial institutions are held accountable and fully protects the
legal rights of consumers, including servicemembers and veterans.
The majority has shamefully moved to nullify the Consumer Bureau's
good work in a move that ultimately enables financial institutions to
get off the hook when they commit wrongdoing, with less redress for
consumers.
Studies have shown that forced arbitration favors big business and
results in less compensation for American consumers who have been
abused or defrauded, if they receive any at all.
This resolution steamrolls over the Consumer Bureau's sensible rule
without regard for the harm that will result for American consumers and
families. This is also despite the broad support for the rule from
consumer advocacy, civil rights, and faith-based groups, legal
scholars, and advocates for servicemembers.
Congress must not curtail the legal rights of consumers, must not
repeal the Consumer Bureau's forced arbitration rule. Vote to protect
consumer rights. Vote to fully restore the American principle of right
to trial by jury. Vote ``no'' on H.J. Res. 111.
Mr. Speaker, I would simply like to say that I keep hearing my
colleagues talk about how fast consumers are taken care of under the
arbitration rule. Yes, because they are getting railroaded.
As I mentioned, they are in the back room without representation.
These are people who have been forced to sign these arbitration
agreements, not even knowing that they signed them.
Most people who go out now to get a credit card or to get a loan of
some kind, they are forced into these agreements and they don't even
know it. They are shocked and surprised when they cannot join with
others who have been ripped off in class action lawsuits.
So don't pay attention to all of the information that you have
received from the opposite side. Remember that the banks and big
businesses win 93.1 percent of the time, not consumers.
Whose side are you on? Are you on the side of consumers or are you
protecting big business?
Mr. Speaker, I yield back the balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I yield the balance of my time to the
gentleman from Texas (Mr. Hensarling), the chairman of the Financial
Services Committee, and I think we are going to have some answers to
those important questions that the ranking member just asked.
Mr. HENSARLING. Mr. Speaker, I thank the gentleman from Missouri (Mr.
Luetkemeyer) for yielding, and I appreciate his leadership on this
issue, as I do the gentleman from Pennsylvania as well.
Mr. Speaker, since 1925, this institution, the United States
Congress, has recognized the right of consumers to engage in
arbitration, which we know for so many consumers is their avenue for
redress of grievance. We know that this has been upheld on multiple
occasions by the Supreme Court. We have almost 100 years of precedence.
And now this rogue agency, the Orwellian-named CFPB, decides to
promulgate a rule, and it is not even an agency. Mr. Speaker, it is one
unelected, unaccountable individual who has decided that Americans no
longer have the right to contract, they no longer have the right to
decide that they would prefer to arbitrate instead of go through a
class action lawsuit.
Mr. Speaker, let's let people know what this is truly about. What
this is about is the trial attorneys relief act. Theirs are the voices
that we are hearing on the other side of the aisle, and we are hearing
them loud and clear, because what we know is that, in class action
lawsuits, consumers end up with almost nothing and the trial lawyers
make out like bandits.
Even in the CFPB's own study, they figured out that those who go
through class action are doing well to get $32.35, yet the trial
lawyers make out with millions. We also know in the CFPB's own study
that those who went through arbitration ended up with settlements of
$5,389.
Mr. Speaker, here are just a couple of different class action
lawsuits that have happened recently. A Dell Computers class action
lawsuit: $500,000 for class members, $7 million for the lawyers; Subway
sandwiches: $50,000 for the class members, $500,000 for the trial
attorneys.
Oh, here is a good one, Mr. Speaker, Coca-Cola class action: $0 for
class members, $1.2 million for the lawyers; L.A. Fitness
International: $7,000 for class members, $200,000 for lawyers.
Mr. Speaker, the American people are not foolish. It is time to drain
the swamp and to start off with the bureaucracy that is taking away
their rights to have dispute resolution through arbitration. They are
tired of seeing others go and kowtow to the trial lawyers lobby in this
town to give them what they want. It is time to make sure that
Americans' consumer rights can be protected, and so it is time that we
pass this Congressional Review Act for all Americans.
Mr. LUETKEMEYER. Mr. Speaker, I yield back the balance of my time.
Mr. GOODLATTE. Mr. Speaker, as Chairman of the Judiciary Committee, I
have worked long and hard to preserve the availability of fair,
affordable arbitration to consumers. Hearings before the Judiciary
Committee have demonstrated repeatedly that arbitration allows
consumers to resolve disputes quickly, fairly and at lower costs than
litigation. It also helps consumers to preserve relationships with
companies with whom they contract, by avoiding the acrimony of
litigation.
The Consumer Financial Protection Bureau's Arbitration Rule threatens
to undo all of that, not to benefit consumers, but to benefit one
special interest--the plaintiffs class-action trial bar.
By prohibiting consumers and companies from contracting to arbitrate
individual matters, rather than litigate disputes through class
actions, it ensures a steady stream of class-action litigation--and
handsome class-action attorneys' fees--for the trial bar. But for
consumers, it burdens their freedom of contract, subjects them to long,
drawn-out class-action litigation, and sets up scenarios in which large
portions of any recoveries they obtain will go, not to them, but to
class-action lawyers with whom they are forced to deal.
For companies, meanwhile, the Rule threatens to force them into
choosing whether to continue to fund their arbitration programs or,
instead, to shutter those programs to preserve funds for high-dollar
class-action defense.
I urge my colleagues to vote for this resolution and against the
CFPB's special-interest, anti-consumer rule.
Ms. JACKSON LEE. Mr. Speaker, I rise in strong opposition to H.J.
Res. 111, which would repeal the Arbitration Rule recently created by
the Consumer Financial Protection Bureau.
The Arbitration Rule is an important victory for consumer protection,
because it prevents banks and other financial institutions from
stripping consumers of their constitutionally-guaranteed right to a day
in court.
The ``forced arbitration'' clauses that this rule addresses prevents
a consumer from filing a lawsuit against a company, and always forces
the consumer into a private and confidential arbitration process that
operates outside of the legal system.
Additionally, these clauses, which are often buried in the fine-print
of agreements and do not allow the consumer any authority to change
them, frequently prohibit class-action claims.
This means that even if there are thousands of consumers who have
been hurt by a bank or financial institution in a similar way, they
would not be able to join their complaints into one case.
By forcing each and every consumer to endure arbitration on his or
her own, outcomes for cases with the exact same complaints will vary
unjustly, because arbitration does not set legal precedent.
Mr. Speaker, these forced arbitration clauses essentially amount to a
rip-off clause.
It is clear that this rip-off clause is stacked against the consumer
and is meant to shield predatory banks, payday lenders, credit card
companies and other financial institutions from accountability when
they cheat or plunder consumers.
In April of this year, it was revealed that Wells Fargo opened as
many as 149,857 fraudulent bank accounts in my home state of Texas,
including many in Houston.
[[Page H6278]]
But the rip-off clause prevented consumers from getting justice.
The Consumer Financial Protection Bureau's Arbitration Rule
rightfully aims to protect consumers from being forced to sign away
their legal rights when doing something as simple as opening a bank
account, obtaining a credit card, financing a home, or obtaining a
private student loan.
The CFPB's Arbitration Rule makes it easier for consumers to file a
lawsuit if they are harmed by a bank or financial institution, and
increases transparency in the arbitration process.
The Arbitration Rule strongly serves the public interest.
H.J. Res. 111 is only the latest in a long series of attacks that
Republicans have leveled against the Consumer Financial Protection
Bureau since its very creation in 2011.
The Bureau is a tremendous ally in the fight for consumer protection,
and it is imperative that its work be allowed to continue.
It is unconscionable that Republicans are working so hard to repeal a
rule that only serves to protect consumers from harmful and predatory
practices by the financial services industry.
I urge all of my colleagues to join me in rejecting this harmful
resolution.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 468, the previous question is ordered.
The question is on the engrossment and third reading of the joint
resolution.
The joint resolution was ordered to be engrossed and read a third
time, and was read the third time.
The SPEAKER pro tempore. The question is on the passage of the joint
resolution.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded Vote
Ms. MAXINE WATERS of California. Mr. Speaker, I demand a recorded
vote.
A recorded vote was ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on passage of H.J. Res. 111 will be followed by a 5-minute
vote on the motion to suspend the rules and pass H.R. 3364.
The vote was taken by electronic device, and there were--ayes 231,
noes 190, not voting 12, as follows:
[Roll No. 412]
AYES--231
Abraham
Aderholt
Allen
Amash
Amodei
Arrington
Babin
Bacon
Banks (IN)
Barletta
Barr
Barton
Bergman
Biggs
Bilirakis
Bishop (MI)
Bishop (UT)
Black
Blackburn
Blum
Bost
Brady (TX)
Brat
Bridenstine
Brooks (AL)
Brooks (IN)
Buck
Bucshon
Budd
Burgess
Byrne
Calvert
Carter (GA)
Carter (TX)
Chabot
Cheney
Coffman
Cole
Collins (GA)
Collins (NY)
Comer
Comstock
Conaway
Cook
Cramer
Crawford
Culberson
Curbelo (FL)
Davidson
Davis, Rodney
Denham
Dent
DeSantis
DesJarlais
Diaz-Balart
Donovan
Duffy
Duncan (SC)
Duncan (TN)
Dunn
Emmer
Estes (KS)
Farenthold
Faso
Ferguson
Fitzpatrick
Fleischmann
Flores
Fortenberry
Foxx
Franks (AZ)
Frelinghuysen
Gaetz
Gallagher
Garrett
Gianforte
Gibbs
Gohmert
Goodlatte
Gosar
Gowdy
Granger
Graves (GA)
Graves (LA)
Griffith
Grothman
Guthrie
Handel
Harper
Harris
Hartzler
Hensarling
Herrera Beutler
Hice, Jody B.
Higgins (LA)
Hill
Holding
Hollingsworth
Hudson
Huizenga
Hultgren
Hunter
Hurd
Issa
Jenkins (KS)
Jenkins (WV)
Johnson (LA)
Johnson (OH)
Johnson, Sam
Jordan
Joyce (OH)
Katko
Kelly (MS)
Kelly (PA)
King (IA)
King (NY)
Kinzinger
Knight
Kustoff (TN)
Labrador
LaHood
LaMalfa
Lamborn
Lance
Latta
Lewis (MN)
LoBiondo
Long
Loudermilk
Love
Lucas
Luetkemeyer
MacArthur
Marchant
Marino
Marshall
Massie
Mast
McCarthy
McCaul
McClintock
McHenry
McKinley
McMorris Rodgers
McSally
Meehan
Messer
Mitchell
Moolenaar
Mooney (WV)
Mullin
Murphy (PA)
Newhouse
Noem
Norman
Nunes
Olson
Palazzo
Paulsen
Pearce
Perry
Pittenger
Poe (TX)
Poliquin
Posey
Ratcliffe
Reed
Reichert
Rice (SC)
Roby
Roe (TN)
Rogers (AL)
Rogers (KY)
Rohrabacher
Rokita
Rooney, Francis
Rooney, Thomas J.
Ros-Lehtinen
Roskam
Ross
Rothfus
Rouzer
Royce (CA)
Russell
Rutherford
Sanford
Schweikert
Scott, Austin
Sensenbrenner
Sessions
Shimkus
Shuster
Simpson
Smith (MO)
Smith (NE)
Smith (NJ)
Smith (TX)
Smucker
Stefanik
Stewart
Stivers
Taylor
Tenney
Thompson (PA)
Thornberry
Tiberi
Tipton
Trott
Turner
Upton
Valadao
Wagner
Walberg
Walden
Walker
Walorski
Walters, Mimi
Weber (TX)
Webster (FL)
Wenstrup
Westerman
Williams
Wilson (SC)
Wittman
Womack
Woodall
Yoder
Yoho
Young (AK)
Young (IA)
Zeldin
NOES--190
Adams
Aguilar
Barragan
Bass
Beatty
Bera
Beyer
Bishop (GA)
Blumenauer
Blunt Rochester
Bonamici
Boyle, Brendan F.
Brady (PA)
Brown (MD)
Brownley (CA)
Bustos
Butterfield
Capuano
Carbajal
Cardenas
Carson (IN)
Cartwright
Castor (FL)
Castro (TX)
Chu, Judy
Cicilline
Clark (MA)
Clarke (NY)
Clay
Cleaver
Clyburn
Cohen
Connolly
Conyers
Cooper
Correa
Costa
Courtney
Crist
Cuellar
Davis (CA)
DeFazio
DeGette
Delaney
DeLauro
DelBene
Demings
DeSaulnier
Deutch
Dingell
Doggett
Doyle, Michael F.
Ellison
Engel
Eshoo
Espaillat
Esty (CT)
Evans
Foster
Frankel (FL)
Fudge
Gabbard
Gallego
Garamendi
Gomez
Gonzalez (TX)
Gottheimer
Green, Al
Green, Gene
Grijalva
Gutierrez
Hanabusa
Hastings
Heck
Higgins (NY)
Himes
Hoyer
Huffman
Jackson Lee
Jayapal
Jeffries
Johnson (GA)
Johnson, E. B.
Jones
Kaptur
Keating
Kelly (IL)
Kennedy
Khanna
Kihuen
Kildee
Kilmer
Kind
Krishnamoorthi
Kuster (NH)
Langevin
Larsen (WA)
Larson (CT)
Lawrence
Lee
Levin
Lewis (GA)
Lieu, Ted
Lipinski
Loebsack
Lofgren
Lowenthal
Lowey
Lujan Grisham, M.
Lujan, Ben Ray
Lynch
Maloney, Carolyn B.
Maloney, Sean
Matsui
McCollum
McEachin
McGovern
McNerney
Meeks
Meng
Moore
Moulton
Murphy (FL)
Nadler
Neal
Nolan
Norcross
O'Halleran
O'Rourke
Pallone
Panetta
Pascrell
Payne
Pelosi
Perlmutter
Peters
Peterson
Pingree
Pocan
Polis
Price (NC)
Quigley
Raskin
Rice (NY)
Richmond
Rosen
Roybal-Allard
Ruiz
Ruppersberger
Rush
Ryan (OH)
Sanchez
Sarbanes
Schakowsky
Schiff
Schneider
Schrader
Scott (VA)
Scott, David
Serrano
Sewell (AL)
Shea-Porter
Sherman
Sinema
Sires
Slaughter
Smith (WA)
Soto
Speier
Suozzi
Swalwell (CA)
Takano
Thompson (CA)
Thompson (MS)
Titus
Tonko
Torres
Tsongas
Vargas
Veasey
Vela
Velazquez
Visclosky
Walz
Wasserman Schultz
Waters, Maxine
Watson Coleman
Welch
Wilson (FL)
Yarmuth
NOT VOTING--12
Buchanan
Costello (PA)
Crowley
Cummings
Davis, Danny
Graves (MO)
Lawson (FL)
Meadows
Napolitano
Palmer
Renacci
Scalise
{time} 1706
Ms. BASS changed her vote from ``aye'' to ``no.''
Mr. ADERHOLT changed his vote from ``no'' to ``aye.''
So the joint resolution was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated against:
Mr. LAWSON of Florida. Mr. Speaker, On rollcall vote No. 412 I was
unavoidably detained. Had I been present, I would have voted ``no.''
____________________