[Congressional Record Volume 163, Number 129 (Monday, July 31, 2017)]
[Senate]
[Pages S4629-S4630]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WELLS FARGO AND FORCED ARBITRATION
Mr. BROWN. Mr. President, a number of Wall Street banks, car title
lenders, big corporations, and payday loan sharks have two things in
common: They have a record of ripping off consumers, and they have
armies of expensive lawyers and lobbyists in Washington, in Columbus,
and in State capitals all over this country who protect them from
facing the consequences.
That is why it is so important that ordinary American consumers have
their own cop on the beat--the Consumer Financial Protection Bureau.
The recent abuses by Wells Fargo are the latest proof of how necessary
the Consumer Financial Protection Bureau's work is.
Less than a year ago, we learned that Wells Fargo secretly opened
millions of phony bank and credit card accounts without customers'
permission. The CEO of Wells Fargo had to resign as a result. This was
an outrageous abuse of American consumers. The sheer size and scope of
this scam are breathtaking. In total, Wells Fargo may have opened as
many as 3.5 million unauthorized accounts--meaning, it opened these
accounts without the accountholders even necessarily knowing that they
did it, without permission--costing customers some $2.5 million in
fees.
The abuses are bad enough. To make matters worse, Wells Fargo tried
to keep this scandal hidden from the public, and it used something
called the ``forced arbitration clauses,'' which are buried in the fine
print of customers' contracts, to deny them their day in court. There
is hardly anybody in this country who has not confronted small print in
a contract when signing that contract, especially with a financial
institution. Customers first sued over these fake accounts back in
2013, but Wells Fargo then forced them into secret arbitration
proceedings, keeping this scam under wraps and blocking consumers from
obtaining any relief.
Last year, the Consumer Financial Protection Bureau and other
watchdogs blew the lid off of this scandal. Customers sued once again,
and, once again, the bank tried to block them from getting relief in
court. This time, because of the Consumer Financial Protection Bureau,
the LA Times, and others who shone a light on the scandal and on all of
the bad press that went with it, Wells Fargo relented. So, after two
congressional hearings and a flood of bad headlines, Wells Fargo is
cutting a deal in its phony account scandal. Yet now we have learned
that this is not the only scam that one of America's largest banks has
pulled.
Just last week, we learned that the bank forced unwanted insurance on
800,000 auto loan borrowers, potentially pushing tens of thousands into
default and repossession, and it is still using these forced
arbitration clauses in its contracts in order to cheat future
consumers, including in the contracts in this auto loan scam.
The only thing more outrageous than the fact that Wells Fargo
continues to cheat its customers is the fact that Members of Congress--
a lot of Members of Congress in this body and down the hall--are trying
to make it even harder for those customers to seek justice in their
overturning the arbitration rule. They think that forced arbitration
and the fine print, which most people do not read and most people do
not understand if they do read it, is legitimate. No wonder so many
hard-working Americans believe that the system is rigged against them
in Wall Street's favor.
These scams have caused real damage for hundreds of thousands of
Americans as 275,000 Wells Fargo customers have been forced into
delinquency by being charged for unnecessary insurance, and 20,000
vehicles have been unfairly repossessed because of this bank's
behavior.
Wells Fargo is not alone. Santander has used forced arbitration
clauses against servicemembers. It is a Spanish company that does
business in the United States and uses forced arbitration clauses
against American servicemembers--again, for illegal car repossessions.
In 2015, Santander used forced arbitration to block an Army National
Guard sergeant from seeking justice after the bank illegally
repossessed his car while he was serving our country overseas.
I see that kind of thing happening at Wright-Patterson Air Force Base
in Dayton. Air Force men and women are not always making big salaries,
to put it mildly, as they are serving their country. They do not make a
lot of money, and a lot of these young families struggle. Yet
predators--companies like Wells Fargo and payday lenders--continue to
prey on them. The Consumer Financial Protection Bureau stands with
them. The CFPB is looking out for folks like the Army National Guard
sergeant, like those at the Wright-Patterson Air Force Base, and like
those at the Air Force bases in Springfield and Mansfield and Toledo
and Youngstown.
Yet, with all of this happening, some Members of Congress, again, are
doing
[[Page S4630]]
the bidding of Wall Street lobbyists. The Bureau just finalized a new
rule that limits the arbitration clauses that allow big corporations to
get away with ripping off servicemembers, students, and other hard-
working Americans, but the ink is barely dry on this new consumer
protection, and big banks and their allies in Congress--and God knows
they have a lot of allies in Congress and allies in the
administration--are already trying to overturn this rule.
Last week, Republicans in the House voted to overturn this rule that
ensures that all Ohioans who have been ripped off by banks or payday
lenders are able to have their day in court. Despite promising during
his campaign to look out for the little guy, President Trump's Acting
Comptroller of the Currency, who is also--alas--a former Wells Fargo
lawyer, is trying to get the Consumer Financial Protection Bureau to
back off that rule.
It is unconscionable that Washington politicians are undermining the
rights of consumers to have their day in court when they are cheated by
banks and payday lenders. Folks in Washington who want to dismantle the
Consumer Financial Protection Bureau and gut its rules seem to have
collective amnesia about the devastation that Wall Street greed has
wreaked on communities across the country, but most Ohioans do not have
that luxury. They are still recovering.
I and my wife, Connie, live in the city of Cleveland, with the ZIP
Code 44105. At this time 10 years ago, during the first half of 2007,
there were more foreclosures in that ZIP Code than in any ZIP Code in
the United States of America. So I have seen the aftermath. I have seen
what has happened with Wall Street greed and the kind of collective
amnesia in this body whenever Wall Street wants something, whenever the
payday lenders want something, whenever the big banks want something,
and Congress rushes in to help them and to respond to their lobbyists
and their lawyers who lobby this body.
It is pretty simple. Gutting the Consumer Financial Protection
Bureau's arbitration rule means banks get away with cheating their
customers.
So I ask Senators in this body to ask themselves: Whose side are you
on? Are you on the side of the payday lenders and Wells Fargo when they
defraud the public or are you on the side of service men and women and
the side of people who have lost their cars, which were repossessed
because of the unilateral actions by this bank?
Those are the same big banks that preyed on working families before
the crisis wrecked the economy and handed taxpayers the bill. Is that
whose side we are on or are we on the side of consumers?
Mr. President, I yield the floor.
Adjournment Until 10 a.m. Tomorrow
The PRESIDING OFFICER. Under the previous order, the Senate stands
adjourned until 10 a.m. tomorrow.
Thereupon, the Senate, at 6:37 p.m., adjourned until Tuesday, August
1, 2017, at 10 a.m.
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