[Congressional Record (Bound Edition), Volume 163 (2017), Part 11]
[Senate]
[Pages 16421-16445]
[From the U.S. Government Publishing Office, www.gpo.gov]




 PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF A RULE SUBMITTED BY BUREAU 
                    OF CONSUMER FINANCIAL PROTECTION

  The PRESIDING OFFICER. The clerk will report the joint resolution.
  The legislative clerk read as follows:

       A 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.''

  Mr. CRAPO. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BROWN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Daines). Without objection, it is so 
ordered.
  Mr. BROWN. Mr. President, what Congress is trying to do today, this 
evening, as long as it takes, as long as the arms are twisted, is 
frankly outrageous. Our job is to look out for the people whom we 
serve, not to look out for Wells Fargo, not to look out for Equifax, 
not to look out for Wall Street banks, not to look out for corporations 
who scam consumers.
  Forced arbitration, pure and simple, takes power away from ordinary 
people. It gives it to the big banks, it gives it to Equifax, it gives 
it to Wells Fargo, it gives it to Wall Street companies that already 
have an unfair advantage. We know the White House increasingly looks 
like a retreat for Wall Street executives. I would hope the Senate 
wouldn't follow suit.
  Look at Equifax. In early September, we learned it compromised the 
personal data of more than 145 million Americans'--5 million in my 
State, probably twice that in the Presiding Officer's State--names, 
dates of birth, addresses, Social Security numbers, driver's licenses, 
more than half the adult population of the United States of America.
  So how did Equifax respond? By immediately trying to trick 
customers--their consumers, their customers--into signing away their 
rights to access the court system in exchange for credit monitoring.
  So here is what Equifax did in simple terms. Equifax said: Oh, we 
will give you a free year of credit monitoring; sign right here. Oh, 
yeah, when you sign right here, the fine print says: but you can't ever 
sue us. You have to go through this forced arbitration, which of course 
almost nobody does, almost nobody understands, and almost no consumer 
ever wins. Only after Senators and consumer groups led a public outcry 
did they back down.
  We sat in the Banking Committee and listened to the just-retired CEO 
of Equifax and then the next week listened to the trade association 
where the CEO of the trade association, who wasn't paid the tens of 
millions of dollars, I assume, that the retired CEO of Equifax was--the 
recently retired because he didn't do his job, even though he was 
getting all kinds of compensation. There is more on that later.
  They backed down from this idea of forced arbitration because the 
public said: You basically have to be kidding. You are going to defraud 
145 million

[[Page 16422]]

people, and then they are going to sign something and the fine print 
says: Sorry, nah, nah, nah, nah, nah, you can't sue us. So they backed 
down. Great.
  Then he said he was going to give up his bonus. That was really 
generous when he made in 2016 and 2017--as Senator Crapo and I in the 
Banking Committee talked about today--he made about $140 million in 
those 2 years, which is not real difficult math. There were 145 million 
people scammed, and the CEO, not doing his job, made $140 million, so 
that is about a dollar per ``scamee.'' I know that is not a word, but 
it sort of fits.
  You would think after public shaming, Equifax would have learned its 
lesson. So last week Equifax again was just abusing the public trust. 
You wonder why people are cynical or people are skeptical. People are 
so frustrated about Wall Street and about financial services in this 
country because you have these multigazillionaires--again, in 2 years, 
he made $140 million. Well, you have these very wealthy executives who 
think they are doing us a favor because they are giving back their 
bonus. They already have $100 million in their pocket, and that is just 
in the last 2 years. Who knows how far it goes back.
  So they sent a representative to testify in front of the Banking 
Committee. Do you know what he said when we asked him--I asked him and 
others asked him--he still thinks it is appropriate for Equifax and the 
other credit bureaus to use forced arbitration clauses that prevent 
Americans they have hurt from having their day in court. He seemed to 
learn nothing from this. Even after the huge harm Equifax has caused 
145 million Americans, 5 million Ohioans, they still defend their use 
of forced arbitration clauses.
  Why do they like them so much? Why are they willing to stand strong 
and to hold on to their right to forced arbitration? Because they make 
so much money from forced arbitration because it keeps that power 
relationship. When Wall Street has all the power and 145 million 
consumers have almost no power--that is why they like forced 
arbitration and that is why they are turning the heat up on all of my 
colleagues here to stand strong for the banks, for Wall Street, for 
Equifax, for Wells Fargo, for forced arbitration. That is Equifax.
  Let's take a look at Wells Fargo. In 2013, they used a forced 
arbitration clause to silence a customer who had accused the company of 
opening fake accounts in his name. OK. I will say that again. They used 
a forced arbitration clause to silence a customer who had accused the 
company of opening fake accounts in his name. Well, it turns out this 
customer was not just right, but we found out Wells Fargo opened 3.5 
million of these fake accounts. Think about that. You have a 
relationship with a bank, and it happens to be Wells Fargo, which used 
to have a really good reputation as one of America's largest Wall 
Street banks--and neighborhood banks too. There are 6 million, if I am 
right, 6 million community banks, as they like to say. There are 6 
million little branch offices in everybody's neighborhood.
  So this bank took relationships they had with their customers, and 
they opened accounts pretty much for 3.5 million of their customers--
accounts they never approved. Say you had a checking account with them. 
They went and opened another checking account in your name and didn't 
tell you. That is what they did.
  So then they subjected their employees who opened those accounts to 
harsh sales goals. That is what they did--harsh sales goals. They 
threatened to fire anyone who didn't keep up. Here is the forced 
arbitration. Because Wells Fargo had the power of the forced 
arbitration clause, they were able to sweep this 2013 lawsuit under the 
rug, allowing the scandal to continue for years.
  So go back to that. In 2013, if that customer didn't have that forced 
arbitration--which that customer didn't even know he or she signed. 
When they wanted to sue, they found out they couldn't sue because they 
had signed, in the really small print that almost nobody reads--I am 
not a lawyer, and I don't know if I could understand that small print. 
I know many Americans can't. So that person couldn't sue.
  Imagine if that person had been able to sue in an open court and then 
in discovery they had found out: Oh, my gosh. Wells Fargo opened 3.5 
million of these accounts. Maybe we ought to do something about it. 
Instead, because of forced arbitration, the public didn't find out 
about what Wells Fargo had done until about 3 years later. So think of 
the damage. Maybe it wasn't 3.5 million cases--maybe they didn't open 
3.5 million in 2013. Maybe it was only a million there, but every month 
they opened more and more and more fake accounts, false accounts, 
because nobody could sue because they were forced into arbitration, and 
arbitration always happens in a back room somewhere. Nobody really 
knows it is going on.
  Again, think how much damage could have been prevented if that 
customer was allowed to take Wells Fargo to open court 4 years ago. 
When the scandal was finally brought to light, customers found out that 
forced arbitration was such a powerful tool for Wells Fargo and others 
and that it was all without their consent.
  The Economic Policy Institute studied people who went into 
arbitration with Wells Fargo. They found out, on average--now, most 
people don't even try with arbitration. They just give up because it is 
only a few dollars, but those courageous souls or angry customers who 
actually went into arbitration, ended up--they didn't just lose and not 
win any money from Wells Fargo, they, on the average, had to pay Wells 
Fargo--maybe we would call it, in layman's terms, a countersuit in some 
sense--they had to pay Wells Fargo an average of $11,000.
  So they can't sue under Federal law. They have lost their day in 
court, under Federal law, because of this forced arbitration law. So 
they went to arbitration, and Wells Fargo, with their very smart, very 
well-paid lawyer--keep in mind, their CEO made about $20 million. Their 
really well-paid legal team does very well. So that well-paid legal 
team went to work, and the average customer, who had no legal team on 
her side or on his side, ended up paying Wells Fargo, on the average, 
$11,000. No wonder they love this forced arbitration law.
  You heard that right, the customers ended up paying the bank. So the 
same bank that cheated customers into opening false accounts--they 
cheated, they deceived into opening false accounts and that doesn't 
even talk about the car insurance they made them buy down the road. 
That is another story. The same bank that cheated customers into 
opening false accounts, the customers ended up having to pay Wells 
Fargo for the privilege of getting scammed. Congratulations.
  No wonder people don't trust Wall Street. No wonder people are mad at 
Wells Fargo and Equifax and these companies that scam the public and 
these banks that--I live in Cleveland, OH, in ZIP Code 44105. My ZIP 
Code had more foreclosures in 2007 than any ZIP Code in the United 
States of America, and I see what these banks did to my neighborhood, 
and I see what they do to Wells Fargo accountholders, and I see what 
they are doing to the 145 million whom Equifax has scammed.
  Studies show that Wall Street and other big companies win 93 percent 
of the time in arbitration. Ninety-three percent of the time in 
arbitration the companies win. No wonder they are fighting like hell. 
No wonder they have lobbied this place like we have never seen. No 
wonder every Wall Street firm is down here begging their Senators to 
stand strong with Wall Street and pass this CRA, pass this resolution 
to undo the rule stopping forced arbitration.
  So Wells Fargo's multidecamillionaire CEO came and testified in front 
of the Banking Committee early this month on an entirely new scandal. 
This is another Wells Fargo scandal, a scandal the last CEO in front of 
us didn't disclose. There was a new scandal he knew about and didn't 
tell us about. He said that Wells Fargo plans to keep using forced 
arbitration. It is amazing that bank that has hurt so many Americans 
would continue to crusade against consumers' right to a day in court.

[[Page 16423]]

  This vote is all about a consumer's right to a day in court, pure and 
simple. These forced arbitration clauses are powerful. They are 
everywhere. They are in student loans. They are in credit card 
agreements. They are in nursing home agreements, even in employment 
contracts.
  Gretchen Carlson, the well-known FOX News anchor, was prevented from 
suing her employer for sexual harassment by a forced arbitration clause 
in her employment contract. She has been urging Senators today to vote 
against the repeal of the consumer bureau's rule. In her words, forced 
arbitration ``has silenced millions of women who otherwise may have 
come forward.'' With all the other things about forced arbitration, 
think about what she said. She says forced arbitration ``has silenced 
millions of women who otherwise may have come forward.''
  Forced arbitration is about the biggest companies in the country, the 
biggest Wall Street firms and silencing customers, silencing victims. 
It is about giving more power to corporations. If you ask Americans if 
they think corporations have too much power, resoundingly, they say 
yes. This gives more power to those corporations that already have too 
much power in the lives of working Americans.
  Let me tell you a story about an Ohioan. I will use only his first 
name, George. George is from Mentor, OH, a community east of Cleveland 
in Lake County. George's wife suffered physical and mental abuse in a 
nursing home. Guess what. The nursing home had an arbitration clause. 
It denied him and his family their day in court. This nursing home 
could physically and mentally abuse his wife, who was helpless in this 
nursing home. She couldn't really fight back. She couldn't really do 
much herself to stop it. They couldn't go to court because they had 
signed a forced arbitration clause. George didn't know what a forced 
arbitration clause was, I assume, until that happened.
  Forced arbitration clauses were so powerful and so effective that 
when George went to a lawyer, his lawyer said: You don't stand a chance 
fighting against it because they are going to put you into forced 
arbitration. They are not going to give you a free day in court.
  Veterans and servicemembers have a lot of experience with this issue. 
A big Wall Street bank called Santander was illegally repossessing cars 
from servicemembers all over the country several years ago. When 
servicemembers spoke up about their rights--special protections they 
earned by serving our country--Santander used forced arbitration to 
keep them out of court.
  We talk a good game about veterans here. We are always saying how we 
are on the side of veterans. I have served in the Veterans' Affairs 
Committee longer than any Ohio Senator ever. I pay a lot of attention 
to these issues, and I hear all of my colleagues mouth wonderful words 
about how we love veterans and ought to take care of veterans. The 
American Legion held its national convention in August and adopted a 
resolution supporting the consumer bureau's rule and opposing today's 
attempt to repeal it. The assistant director of the American Legion's 
veterans employment and education division said: ``Our membership has 
stated unequivocally that we will not accept a future where our 
military veterans' financial protections are chipped away to increase 
the margins of the financial sector.''
  These arbitration rules go after families of people in nursing homes. 
They go after customers who they get to sign up for things they didn't 
know they were signing up for. They go after people whose credit has 
been hacked and whose credit rating has been dinged, and they go after 
soldiers, airmen, sailors, and Coast Guard members. How will Members of 
this body look those servicemembers in the eye and explain that they 
chose to stand with Wall Street over our military members?
  Forced arbitration hurts the 3.5 million people who had bank accounts 
fraudulently opened by Wells Fargo. Forced arbitration hurts the 145 
million Americans who had their personal data put at risk by Equifax. 
It hurts employees who have been hurt by their employers. It hurts 
students who have been cheated by for-profit colleges. It hurts family 
members in nursing homes. It hurts America's veterans. Forced 
arbitration hurts millions of Americans with student loan debt and 
credit cards. Damn near everybody in the country is potentially 
vulnerable to forced arbitration.
  Who does forced arbitration help? We know that it is Wall Street 
banks and huge corporations that never pay the price for cheating 
working people. Those CEOs who make $20 million and, then, generously 
give up their bonuses, will not give up forced arbitration because they 
know that will help their bottom line. That will help their stock 
bounce back. That will help their dividend. That will help their 
compensation.
  I urge my friends on the other side to ask themselves: Whose side are 
we on--the people we serve who get hurt by forced arbitration or Wall 
Street CEOs who cash in? I ask my colleagues: Choose to side with the 
people we serve. Vote against repeal of the consumer bureau's rule. 
Give some power back to regular Americans.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, we are having a very interesting and, 
obviously, intense debate tonight about arbitration clauses in 
financial contracts. Those who oppose the resolution that is on the 
floor tonight would have you think that the battle is over whether or 
not to stop what they call forced arbitration clauses in contracts.
  The real issue is whether we will try to force the resolution of 
disputes in financial resolution into class action lawsuits. This is a 
question about whether we should force dispute resolution mechanisms 
into class actions. In fact, let me read the actual language of the 
rule that we are debating. It doesn't say anything about forced 
arbitration clauses. In fact, the rule doesn't stop arbitration clauses 
in contracts. It stops protections in arbitration clauses against class 
action litigation. Let's read what the actual rule says: The CFPB rule 
prohibits a company from relying in any way on a predispute arbitration 
agreement with respect to any aspect of a class action that concerns 
any consumer financial product or service.
  In other words, the entire purpose of this rule is to promote class 
action litigation and to stop arbitration resolution when there is a 
dispute. Specifically, the rule requires any predispute arbitration 
agreement to include this specific language. In other words, people and 
companies are required to put this language into their agreements. This 
tells you what the dispute is about.
  The language mandated by this rule is this: We agree that neither we 
nor anyone else will rely on this agreement to stop you from being part 
of a class action case in a court. You may file a class action in court 
or you may be a member of a class action filed by someone else.
  It is about as clear as it could be. The issue here is this: Do we 
force the resolution of disagreements or disputes in financial 
transactions into class action litigation?
  This is a rule to benefit the plaintiff's bar.
  The rule also requires that companies that go through arbitration 
must submit records of arbitration cases to the CFPB within 60 days of 
those records.
  Some have raised the argument that arbitration agreements gag 
consumers, including, as was suggested, saying that, were it not for 
arbitration agreements, the Wells Fargo fake accounts scandal would 
have been discovered earlier. The only thing confidential in 
arbitration is what is brought as specific evidence in that arbitration 
proceeding. The clauses in the law permit people to discuss the claims 
they are bringing and the company and the individual, if they choose to 
discuss them.
  Nothing stopped anyone from talking publically about what was going 
on at Wells Fargo. Arbitration keeps evidence confidential for the 
protection of consumers, but it does not keep them from speaking out 
about it.

[[Page 16424]]

  Further, if judges believe that clauses do that, they often find them 
unconstitutional, as they stop consumers from speaking out. In fact, if 
you think about it, what generated the public understanding of the 
Wells Fargo circumstance, if I recall correctly, was a Los Angeles 
Times news article. It was the CFPB itself that failed, apparently, to 
read the news and understand what was going on at Wells Fargo. That was 
the reason that we saw it take so long for any action to take place--
not an arbitration agreement.
  In addition, those who are attacking arbitration agreements seem to 
make the case that arbitration agreements stop consumers from having 
options. The CFPB's own study said: The clear majority of arbitration 
clauses within our review specifically recognize and allow access to 
small claims court as an alternative to arbitration.
  Let's just be clear. Arbitration clauses don't gag consumers. They 
don't stop them from speaking out about what they see going wrong. They 
don't force them out of the courts if they want to go into a small 
claims court. The only thing they do that is being objected to here is 
that they try to force them to not agree to go into a class action 
lawsuit. It is literally that question that is the biggest issue that 
we are dealing with here.
  Mr. MERKLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. CRAPO. I haven't finished yet.
  Mr. MERKLEY. I am sorry.
  Mr. CRAPO. I am looking for more pages.
  Mr. MERKLEY. While he is looking, will the Senator perhaps yield for 
a question?
  Mr. CRAPO. I will yield for a question.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. MERKLEY. The thing that confused me about the Senator's 
commentary is that the Senator referred to people, through this 
regulation, being forced into court, but in reality, they would still 
have a choice of arbitration or court, as opposed to being locked into 
arbitration.
  Are you familiar that under this rule people would still have the 
option of arbitration, if they thought that was good?
  Mr. CRAPO. I am familiar that they would still have the option of 
arbitration.
  That is why, when those who criticize our effort to reject this rule 
say we are trying to stop forced arbitration, the rule itself still 
allows arbitration agreements. What it stops is allowing the company to 
reach an agreement with the consumer to avoid class action litigation.
  Mr. MERKLEY. I could possibly clarify that. My understanding is that, 
currently, when you have an arbitration clause, you have one option, 
and that is to go into arbitration.
  Mr. CRAPO. That is not true.
  Mr. MERKLEY. In this rule you have the ability to go to court or the 
ability to go to arbitration.
  Mr. CRAPO. Let me reclaim my time, and the Senator can respond on his 
own time.
  Let me clarify. As I indicated, even the CFPB, in its own study, said 
that most of the contracts--not all companies use the same contract--
already allow two actions: No. 1, to go to small claims court or, No. 
2, to go to arbitration. What the agreements don't allow is class 
action litigation. The specific and only restriction of the rule we are 
debating tonight is about whether class action litigation should be 
incentivized by taking out the ability of companies to insist that not 
be an alternative.
  There is one restriction that we are debating here, and that is 
whether it is appropriate to allow companies to negotiate away class 
action litigation.
  On July 10, the CFPB finalized its rule, as I have said, specifically 
prohibiting the use of predispute arbitration agreements that prevent 
consumers from participating in class action lawsuits.
  The Dodd-Frank Act--the statute under which the CFPB was created--
also set forth when the CFPB was authorized to prohibit, impose 
conditions upon, or limit the use of such agreements; namely, if the 
CFPB finds--and this is what they are required by law to find--that any 
such action was, No. 1, in the public interest and for the protection 
of consumers and, No. 2, consistent with the CFPB study's findings.
  It is clear that the CFPB failed the legal requirements on both 
counts. In 2015 the CFPB released its final study and report on 
predispute arbitration to Congress. To say that the study was flawed is 
an understatement. It was panned for its questionable analysis, data, 
and conclusions by the public, by academics, by consumers, by 
businesses, by Federal regulators, and by Members of Congress who noted 
that it could make consumers worse off by removing access to an 
important dispute resolution tool.
  I will spend a few minutes delineating some of the valid criticisms, 
since the study was the basis and the legal requirement for the final 
rule. First, the study only compared class action settlements with 
arbitration awards. By only looking at arbitration awards and not 
consumer recovery in arbitration settlements that occur before awards, 
the CFPB ignored substantial evidence of arbitration agreements 
benefiting consumers.
  The analogy that comes to mind is thinking about how much money you 
have in the bank by looking at your checking account, while ignoring 
what is in your savings account. Given this methodological flaw, it is 
difficult to make apples-to-apples comparisons about class action 
versus arbitration, but the Wall Street Journal's editorial board made 
a helpful observation: ``Of the 562 class actions the CFPB studied, 
none went to trial.'' Let me read that again: ``None went to trial.'' 
Most were dismissed by a judge or withdrawn by the plaintiffs or 
settled out of class.

       The putative class victims received benefits in fewer than 
     20 percent of the cases, and the average cash recovery was--
     wait for it--$32. Lawyers took an average 24 percent cut of 
     the cash payments, about $424 million in cases that settled.
       Meanwhile, consumers were awarded relief in 32 of the 158 
     arbitration disputes the bureau examined--

  These are arbitration results now--

     and rewards averaged $5,389--or about 57 percent of every 
     dollar claimed. Consumers who used arbitration received 
     relief on average in two months after filing their claim. 
     Class-action members had to wait two years.

  Clearly, the CFPB cherry-picked the information it liked and omitted 
what it did not like. The CFPB and its advocates of the rule also argue 
that the rule restores a consumer's day in court. But, again, the 
CFPB's study explicitly states that no class actions filed during the 
time period that the CFPB studied from 2010 to 2012 even went to trial.
  The study added that most arbitration agreements in consumer 
financial contracts contain a ``small claims court carve-out,'' which 
provides the parties with a contractual right to pursue a claim in 
small claims court.
  The CFPB claims that the rule will deter companies from bad behavior 
in the face of an increase in class action lawsuits. Yet there is no 
evidence to that effect.
  A report released by the Treasury Department this week notes that 
``after years of study, the Bureau has identified no evidence 
indicating that firms that do not use arbitration clauses treat their 
customers better or have higher levels of compliance with the law.''
  The truth is, rather than deterring companies from bad behavior, this 
rule will encourage frivolous lawsuits that companies feel compelled to 
settle, shifting hundreds of millions of dollars from businesses to 
plaintiff attorneys.
  Many Members of Congress have weighed in on both the CFPB's 
arbitration study and how the final rule was developed. In 2015, 86 
Members of the House and Senate wrote to Director Cordray asking that 
he reopen the arbitration study due to concerns about the Bureau's 
process. In 2016, 140 Members of the House and Senate again wrote to 
Director Cordray, raising concerns about the CFPB's proposed rule and 
asking the Bureau to reexamine their approach to arbitration. 
Unfortunately, the final rule was still issued without addressing any 
of the concerns identified.

[[Page 16425]]

  Federal financial regulators have raised a number of concerns with 
the assumptions used in the development of the rule and the lack of 
consideration for alternative approaches. Recently, the Treasury 
Department issued an analysis that concluded that the CFPB did not 
sufficiently substantiate with any quantitative assessment its 
assumption that the current level of compliance in consumer financial 
markets is ``generally sub-optimal,'' which means that the CFPB has not 
adequately demonstrated the rule will solve the assumed problem it set 
out to fix.
  Treasury also noted the CFPB could have considered less costly 
alternatives, including more effectively informing consumers, clearer 
disclosure, or more targeted regulation. However, it failed to do so, 
opting instead for an all-or-nothing approach, which, again, is 
specifically designed to generate a phenomenal increase in class action 
litigation.
  The Acting Comptroller of the Currency has also raised serious 
concerns with the rule and asked for the opportunity to review the 
CFPB's data and analysis to determine the potential impact of the rule. 
According to a recent letter by the Acting Comptroller of the Currency:

       Eliminating the use of this tool could result in less 
     effective consumer protection and remedies, while simply 
     enriching class-action lawyers.
       At the same time, the proposal may potentially decrease the 
     products and services offered to their consumers, while 
     increasing their costs.

  The CFPB attempted to estimate the increase in costs, albeit 
incompletely, that are associated with this final rule and that could 
be passed onto consumers. The CFPB estimates in its final rule that the 
companies will incur $2.6 billion of additional fees and settlements 
over the next 5 years, $330 million of which will go directly to 
plaintiff lawyers. As astounding as these numbers are, the estimate 
includes only Federal court cases and fails to include State court 
cases.
  Treasury's analysis also notes that the CFPB appears to understate 
the share of class actions dismissed by the courts, thus failing to 
adequately consider the costs of meritless cases. According to 
Treasury, assuming that just 10 percent of class action cases are 
meritless, ``the Rule would have to reduce harm to consumers by $500 
million per year to demonstrate any net benefit to society. The Rule 
does not come close to making that showing.''
  The OCC recently shed more light on how the CFPB's final rule could 
impact the cost of consumer credit. While the CFPB said that it could 
not identify any evidence to that effect, it did concede that ``this 
does not mean that no pass-through [to consumers] occurred; it only 
means that the analysis did not provide evidence of it'' and that 
``most providers will pass through at least portions of some of the 
costs.''
  Using the same data, the OCC conducted its own analysis and found ``a 
strong probability of a significant increase in the cost of credit 
cards as a result of eliminating arbitration clauses.''
  In fact, the OCC found an 88-percent chance that the total cost of 
credit will increase and a 56-percent chance that costs will increase 
by at least 3 percent.
  As Acting Comptroller Noreika noted, that means that a consumer, 
living week to week, could see credit card rates jump from an average 
of 12.5 percent to nearly 16 percent. He correctly added that ``to the 
extent the CFPB's arbitration rule is being undermined, it is 
undermined by the CFPB's own data and the working paper on which the 
CFPB relied.''
  Community banks and credit unions across this Nation are raising 
concerns with the rule. The Independent Community Bankers Association 
opposes the arbitration rule because:

       Community banks are relationship lenders, many of which 
     have served their communities for multiple generations. A 
     reputation for fair dealing is essential for their success, 
     and abusive consumer practices have absolutely no place in 
     their business model. Community banks invest heavily in 
     resolving customer complaints amicably and on a timely basis.

  In addition, the Credit Union National Administration, or CUNA, 
opposes the arbitration rule because ``[a]mong the many consumer 
protections associated with the mission of credit unions is the high-
quality service they provide to their members, which has prompted a 
successful system for quickly and amicably resolving disputes in the 
limited instances where they arise.''
  While the CFPB claims that many community banks and credit unions do 
not even have these clauses, I have heard from many small financial 
institutions that this rule would have a significant impact on their 
operations.
  On July 25, by a vote of 231 to 190, the House voted to overturn this 
rule. The administration weighed in on the House's efforts, saying: 
``This legislation would protect consumer choices by eliminating a 
costly and burdensome regulation and reining in the bureaucracy and 
inadvisable regulatory actions of the CFPB.''
  It is alarming that the CFPB moved forward with a final rule in this 
manner, especially in light of the numerous concerns expressed. The 
CFPB could have made recommendations to improve the arbitration process 
or arbitration clauses if it identified concerns.
  Aside from the substantive concerns about this specific rule, it 
brings the CFPB's own structure and accountability into focus. The CFPB 
is unlike any other Federal agency. Since its creation, we have argued 
that far too much power is invested in the CFPB Director without any 
effective checks or balances.
  Last year, the DC Circuit Court of Appeals ruled that the CFPB, as it 
is currently structured, is unconstitutional. The ruling stated that 
Congress erred in creating a far-reaching agency that is led by a 
single Director. In particular, the ruling noted that ``the CFPB's 
concentration of enormous executive power in a single, unaccountable, 
unchecked Director not only departs from subtle historical practice, 
but also poses a far greater risk to arbitrary decision-making and 
abuse of power.''
  The Director is further insulated by being able to automatically 
withdraw funds from the Federal Reserve, rather than being required to 
justify the CFPB's annual funding needs to Congress.
  The court's decision mirrored arguments from Members of Congress that 
the Director has wide-ranging power with little oversight and is a 
gross departure from the settled historical practice of having 
multimember commissions at agencies to keep them in check. In fact, the 
Senate repeatedly urged the prior administration to impose checks on 
the CFPB.
  In 2011, 44 Senators wrote to the administration expressing concern 
about the lack of accountability in the structure of the CFPB. In 2013, 
43 Senators wrote to the administration once again. In each instance, 
we advocated for the establishment of proper checks and balances for 
the agency, which, had they been imposed, almost certainly would have 
avoided this crisis rule that we see coming out.
  Some of the specific checks and balances for which we advocated 
included replacing the single Director with a bipartisan commission to 
run the CFPB, subjecting the CFPB to congressional appropriations, and 
establishing safety-and-soundness checks for prudential regulators. 
Nevertheless, despite our efforts, this agency remains just as powerful 
and unaccountable today, and this rule is just the most recent 
demonstration of its continued lack of accountability.
  Now the Senate has the opportunity to take another step toward 
holding this agency accountable. The CFPB failed to demonstrate that 
consumers will fare better in light of its arbitration rule. In fact, 
they may be worse off.
  I urge my colleagues to help ensure that consumers maintain access to 
quick, inexpensive, and efficient mechanisms of dispute resolution by 
overturning this rule.
  Thank you.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. MERKLEY. Mr. President, I couldn't disagree more with my 
colleague from Idaho. He gave a very studious presentation that missed 
all the

[[Page 16426]]

key facts. He made a big point out of the fact that we would lose a 
dispute resolution tool, but, in fact, access to small claims and 
access to arbitration remain in place, so it is simply wrong.
  He noted that small claims is a great option, but, of course, what we 
are talking about are provisions in which credit card companies and 
cell phone companies and broadband companies put charges on your bill 
that are unjustified, but they are small amounts. They are little 
amounts. It is $5 here, slammed there; it is $10 there, jammed on your 
bill there. You discover it, and you call them up, and they say: Well, 
you can come to arbitration. Of course, arbitration means they choose 
the decision maker; they pay the decision maker, and that decision 
maker comes to them for future business. So it is completely rigged.
  If anyone wanted to see an example of the swamp at work here in DC, 
we have it on the floor tonight. This is Big Business taking justice 
and ripping it out of the hands of consumers across our Nation.
  It costs fees to go to small claims; you can't go to small claims for 
$10 or $5 or $20. This is well understood.
  My colleague made a big point about the fact that a lot of companies 
settle. These companies have the best lawyers that money can buy. They 
settle only when they have cheated the consumer and they know there is 
a chance they are going to get a worse verdict if it goes to trial. It 
is smart for them, and it saves money for them not to continue to 
adjudicate a case in which, clearly, they are wrong. So, of course, 
they will settle. This is not an argument against consumer rights; it 
is an argument for consumer rights.
  My colleague made the argument that 25 percent of the fees go to the 
lawyers, but he didn't point out that means 75 percent goes to the 
consumers. Why is that a fair deal? Because consumers can't afford to 
go to court for $10 or $20 or $15, so they are awfully happy to be able 
to get 75 percent of what they are owed.
  Again, he didn't begin to mention the fact that the whole point is 
deterrence. These companies are given a right to cheat because there is 
no way for a customer to get a fair adjudication. In arbitration, the 
company chooses the judge; the company pays the judge. And these judges 
come back time and again for case after case after case, finding for 
the companies time after time after time. So if you want a rigged 
system, if you want an example of a swamp flooding this room right 
here, this is it, right here, right now.
  Deterring companies from cheating individuals makes a lot of sense. 
It adds a lot of value to our society. Credit card customers, nursing 
home residents, students with loans, veterans--veterans weigh in 
heavily against the abusive practice of a rigged system--certainly 
customers of cell phone companies and broadband.
  I have had this experience myself. I looked at a bill, and I said: 
Wait, what is this charge on here that I have never seen before? I 
called up the company. Of course, you go through a phone tree, and you 
spend an hour trying to talk to some real person who is way overseas 
somewhere. They say: Well, we just added it to your bill 6 months ago, 
and you should have protested it the first month it was on your bill. 
Well, I don't look at the details every single month to see if the 
company tried to cheat me. And if they did it to me, they did it to 
thousands and thousands of others. They were willing to reimburse 1 
month of this, but not the first 5 months. At $10 a month, that is $50. 
You can't go to small claims for $50. You can't go to court for $50. 
The only fair thing is to have the full range of options, and that is 
taken away by arbitration.
  I would bet none of my colleagues here, not a one--and if any 
colleague would like to stand up and say they disagree, I would like to 
hear it--not a one would agree to have a serious dispute settled in 
which the opponent chooses the judge, pays the judge, and that judge 
gets business from them all the time. That is rigged and that is wrong, 
and that is why I encourage my colleagues to vote against this 
resolution tonight.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Ms. WARREN. Mr. President, Wells Fargo creates 3.5 million fake 
accounts, charging customers fees and ruining credit scores. Equifax 
lets hackers steal personal information on 145 million Americans, 
putting nearly 60 percent of American adults at risk of identity theft. 
And somehow we are about to vote on a Republican proposal that makes it 
harder for consumers to hold companies like Wells Fargo and Equifax 
accountable. I know it sounds nuts, but it is true.
  Here is the issue: If you have a checking account, credit card, 
private student loan, or any number of financial products, there is a 
good chance you have given up your right to go to court if that 
financial firm cheats you. That is because tens of millions of consumer 
financial contracts include a forced arbitration clause that says that 
if this financial company cheated you, you can't join with other 
consumers in court; you have to go to arbitration by yourself. Tens of 
millions of consumers, including around 80 million credit card 
customers, can't go to court if their banks cheat them.
  Think about what this means in the real world. You wake up in the 
morning and find a mysterious $30 fee on your account statement. You 
call the bank and say: I didn't agree to this. The bank tells you to 
pound sand. So what are your options? Well, if there is no forced 
arbitration clause in your contract, you have a choice: You can go to 
court, or, if your bank offers it, you can pursue arbitration.
  Here is what you want to think about. Chances are pretty good that if 
the bank cheated you with a $30 unauthorized fee, there are other 
customers in the same boat. That means, if you want, you can join a 
class action lawsuit against the bank for free. A class action gives 
you a chance to get some money back, and it doesn't cost you anything. 
A class action also means the bank might have to cough up some real 
money and think twice before hitting you and their other customers with 
hidden fees the next time around.
  Now think about what happens if there is a forced arbitration clause. 
You can't join with other customers in court. Your only option is to 
file a solo arbitration claim, which will cost you $200 or more just to 
get started. Who is going to pay $200 up front to try to get back a $30 
fee? No one. That is exactly what the banks are counting on. They can 
get away with nickel and diming you forever.
  But say the bank steals a bigger amount and you just can't stand it 
anymore, so you decide to be one of the roughly 400 consumers a year 
who go before an arbitrator. If you don't like the result, there is no 
appeal. Even worse, the banks are allowed to swipe your wallet in 
secret. The records of these proceedings are not public, so the 
regulators and the American people don't get to know what their banks 
are up to. Does that sound like justice in America?
  Earlier this year, the Consumer Financial Protection Bureau put a 
stop to that. They issued a new rule that prohibits financial companies 
from forcing you to give up your right to join other customers in court 
and hold your bank accountable. House Republicans already voted to 
reverse that rule. The Senate will soon decide whether to follow suit 
and take away American families' freedom to choose to go to court if 
they are cheated by their bank.
  Make no mistake--anyone who votes to reverse this rule is saying loud 
and clear that they stand with banks instead of their constituents, 
because bank lobbyists are the only people asking Congress to reverse 
this rule. Every other organization--all the ones that represent actual 
human beings, not banks--every one of them wants this rule to be saved. 
Let me tell you about some of them.
  The Military Coalition, which represents more than 5.5 million 
veterans and servicemembers, supports the CFPB rule because ``our 
nation's veterans should not be deprived of the Constitutional rights 
and freedoms that they put their lives on the line to protect, 
including the right to have their claims heard in a trial.'' The 
coalition says that ``[f]orced arbitration is

[[Page 16427]]

an un-American system wherein servicemembers' claims against a 
corporation are funneled into a rigged, secretive system in which all 
the rules, including the choice of arbitrator, are picked by the 
corporation,'' and they warn that ``the catastrophic consequences these 
[forced arbitration] clauses pose for our all-voluntary military 
fighting force's morale and our national security are vital reasons'' 
to preserve the rule. That is from the Military Coalition.
  The AARP, which represents nearly 40 million seniors, says that the 
CFPB rule should be preserved because it ``is a critical step in 
restoring consumers' access to legal remedies that have been undermined 
by the widespread use of forced arbitration for many years.'' Older 
consumers are often at increased risk of financial scams, so the ``AARP 
supports the availability of a full range of enforcement tools, 
including the right to class action litigation to prevent harm to the 
financial security of older people posed by unfair and illegal 
practices.'' That is the AARP, which represents seniors across the 
country.
  The Main Street Alliance, which represents thousands of small 
businesses, says that the CFPB rule will help small businesses fight 
against big financial firms that try to drive up their fees. Since 
almost ``20% of [small] business owners rely on credit cards as a 
source of investment capital--many of which contain arbitration 
clauses--forced arbitration makes it nearly impossible for small 
businesses and consumers alike to protest hidden fees, illegal debt 
collection, and other deceptive practices.'' That is from the Main 
Street Alliance.
  So there it is. Veterans, servicemembers, seniors, small businesses, 
and consumers are all lining up to support the CFPB rule. But that is 
not all. Let Freedom Ring, an organization that proudly touts itself as 
``supporting the conservative agenda,'' likes the CFPB rule, too, 
saying it is ``in keeping with our Framers' concerns that without 
appropriate protections, civil proceedings can be used as a means to 
oppress the powerless.''
  That is the thing you have to understand. The effort to reverse the 
CFPB rule isn't about promoting a conservative agenda, and it sure as 
heck is not about promoting a working people's agenda or a small 
business agenda. It is about advancing the banks' agenda, period.
  The banks and their lobbyists actually have the gall to claim that 
they want to kill the rule because it is bad for their customers. That 
claim is just plain laughable. According to a rigorous, 3-year-long 
CFPB study, consumers recovered an average of $540 million annually 
from class action settlements, while receiving less than $1 million 
annually in the arbitration cases the agency reviewed. It is not even 
close. Even if there are instances in which arbitration is a better 
option for consumers than a class action lawsuit, the CFPB rule doesn't 
stop consumers from choosing arbitration. The rule simply says that 
consumers--consumers--should also have the freedom to go to court if 
that is what they prefer.
  I will tell you one thing: When it comes to what is right for 
consumers, I listen to servicemembers, veterans, seniors, consumers, 
and small businesses. I don't listen to bank lobbyists. When a bunch of 
bank lobbyists tell you they know what is best for consumers, hang on 
to your wallet.
  Millions of Americans of all political parties think the game in 
Washington is rigged against them, and this vote is exhibit A. 
Companies like Equifax and Wells Fargo have hurt millions of consumers 
and then turn around and try to escape accountability, using forced 
arbitration clauses. The Republican Congress hasn't done a thing to 
help the people hurt by Wells Fargo. The Republican Congress hasn't 
done a thing to help the people hurt by Equifax. Instead, tonight they 
are actually taking away one of the few legal tools to hold companies 
like Wells Fargo and Equifax accountable.
  This is shameful, and I mean that. Any Senator who votes against our 
servicemembers and our veterans in order to shield big banks from 
accountability should be ashamed. We should vote down this proposal.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Hawaii.
  Ms. HIRONO. Mr. President, the resolution we are debating today 
demonstrates the lengths Donald Trump and the Republican Party will go 
to protect the special interests that contribute billions of dollars to 
their political campaigns.
  Earlier this year, the Consumer Financial Protection Bureau, CFPB, 
issued a rule to prevent certain financial service companies from 
forcing consumers to sign predispute arbitration clauses that block 
class action lawsuits. This might sound like a boring, technical 
change, but it is not. At stake is nothing less than the right of 
millions of Americans to be heard in a court of law.
  Contracts mandating forced arbitration can be found in virtually 
every contract someone signs these days. Every time you agree to an 
update to the iTunes terms of service, purchase a Fitbit, or open a 
credit card, you are signing away your right to join together with 
others to sue in a court of law if something goes wrong.
  In 2010, President Obama and Democrats in Congress created the CFPB 
to protect the American people from predatory business practices by 
consumer finance companies. And while the CFPB can't do anything about 
the iTunes terms or service, it can protect you, through the rule we 
are debating today, from companies that sell products and services 
related to consumer credit, automobile leasing, debt management, credit 
scores, payment processing, check cashing, and debt collection--
industries that serve some of our most vulnerable communities.
  The resolution we are debating today would eliminate these 
protections and expose millions to the tyranny of forced arbitration. 
This is particularly relevant in light of two major news stories this 
year in which the negligence, fraud, and malfeasance of major financial 
institutions harmed consumers across the country. This rule, for 
example, would protect the 805 Hawaii residents who had fake bank 
accounts opened in their names by Wells Fargo. These people suffered 
real and material harm, but the fine print in their agreements 
explicitly prevents them from banding together in a class action 
lawsuit. This rule would prevent banks like Wells Fargo from doing this 
now and in the future.
  In the wake of the massive Equifax data breach, the company initially 
forced consumers who registered for credit monitoring to forgo their 
right to join a class action and instead force them into private 
arbitration. These are high-profile examples of the problem but aren't 
the only ones. Hundreds of Hawaii residents have filed complaints with 
the CFPB about problems with credit reporting agencies and credit 
report errors that can increase the cost of a loan or result in the 
denial of credit.
  Under a recent class action settlement, Hawaii customers falsely 
matched with someone on the terrorist watch list can receive over 
$7,000 from TransUnion. Is it really any wonder why TransUnion and 
other credit bureaus have fought so hard to block class action lawsuits 
with forced arbitration?
  This rule would also protect consumers from predatory payday lenders 
that are extorting over $3 million in fees a year from Hawaii consumers 
alone. Over 98 percent of storefront payday lenders use forced 
arbitration clauses in their contracts.
  Hawaii is home to more than tens of thousands of Active-Duty 
servicemembers, reservists, and veterans. This rule protects them too. 
In 2016, the Office of the Comptroller of the Currency fined Wells 
Fargo millions of dollars after they illegally foreclosed on homes or 
repossessed cars in violation of the Servicemembers Civil Relief Act. 
Without the CFPB rules, similarly affected servicemembers would be 
restricted from banding together to sue. It is why the American Legion, 
in announcing their support for the CFPB's rule and opposition to this 
resolution, said it

[[Page 16428]]

would be ``extremely unfair to bar servicemembers, veterans, and other 
consumers from joining together to enforce statutory and constitutional 
protections in court.'' It isn't difficult to understand why. Big banks 
and megacorporations want to force their customers to adjudicate 
disputes through arbitration.
  According to the CFPB, companies win claims in arbitration 91 percent 
of the time. The deck is stacked against the consumer in these forced 
arbitration situations, and after these judgments, consumers were 
forced to pay an average of over $7,000 to companies to even engage in 
the proceedings. Talk about a major imbalance of power.
  Director Cordray and the entire CFPB spent years developing this 
essential consumer protection regulation, but I am not at all surprised 
that the President and his allies in Congress desperately want to 
eliminate this consumer protection rule. I urge my colleagues to vote 
no on this resolution.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, this vote really gives the U.S. Senate a 
choice. On one side, we have the biggest banks in America, financial 
institutions, which are arguing that you as a consumer, as someone who 
uses their banks, should be basically signing an arbitration clause 
that denies you the freedom to go to court. On the other side, the 
Consumer Financial Protection Bureau has argued these financial 
institutions are misusing this power, denying people access to courts, 
and it should come to an end. That is the choice.
  I think I know who is going to win. I am not sure if the party on the 
other side of the aisle would have called this issue if they didn't 
already have it lined up for the financial institutions. I know many on 
the other side, maybe most, hate the Consumer Financial Protection 
Bureau like the devil hates holy water. The notion that this agency is 
going to stand up for consumers across America is something they find 
repugnant, something they would like to end tomorrow. I say thank 
goodness they are there.
  There ought to be one agency in the Federal Government, at least just 
one, that speaks up for the little guy when it comes to these 
transactions. Think about the 3\1/2\ million people defrauded by Wells 
Fargo. These were people who had their identities stolen, had their 
Social Security numbers purloined for opening credit card and bank 
accounts that they never asked for--3\1/2\ million of them.
  Let me tell you the story of one of them. It is a pretty interesting 
story. Her name is Tracy Kilgore. She is from New Mexico. She was not 
even a customer of Wells Fargo Bank, but she went in because she was 
the treasurer of a local chapter of the Daughters of the American 
Revolution. She went to the Wells Fargo branch one day in 2011 to have 
the names on the organization's existing account changed. A few weeks 
later, she received a rejection letter for a Wells Fargo credit card 
that she had never applied for.
  It turns out the bank teller at Wells Fargo had taken the information 
she had given and submitted a credit card application on her behalf 
without her knowing it. The application was rejected and hurt Ms. 
Kilgore's credit score for a credit card she never asked for. Ms. 
Kilgore is fighting for her right to hold Wells Fargo accountable in 
court and to join with millions like her who have been victims of Wells 
Fargo's misconduct.
  The Republicans tonight are saying they feel sorry for Wells Fargo. 
They really do. To think that this company manufactured and created 
3\1/2\ million phony credit card and bank accounts at the expense of 
customers like Tracy Kilgore doesn't seem to move them at all. Instead, 
they want to stand by Wells Fargo, which put in that credit card 
application an arbitration clause which said: Tracy Kilgore, you can't 
go to court. You can't have your day in court. You have given it up. 
You signed it away to Wells Fargo.
  Would Tracy go to court anyway? Let's say she had to file a new 
credit report and it cost her $100. Is she likely to file a lawsuit 
against Wells Fargo? Probably not. Multiply that times 3\1/2\ million 
people who were defrauded by this bank, and you understand how a class 
action suit can finally hold Wells Fargo's feet to the fire, hold them 
accountable for literally cheating this woman and millions just like 
her.
  The Republicans are arguing tonight that we ought to feel sorry for 
Wells Fargo. I don't. I don't feel sorry for them. I feel sorry for 
Tracy Kilgore, who, because of the arbitration clause, lost her 
opportunity to go to court and ask for simple justice from a judge or 
jury.
  How about Equifax? If you think 3\1/2\ million people defrauded by 
Wells Fargo is a pretty awful situation, here is one dramatically 
worse. One hundred forty-five million--let me see. Right off the top of 
my head, that is about half of the people in this country. One hundred 
forty-five million Americans--five and one-half million who live in my 
State, that is almost half of our State population--had their personal 
data exposed in a massive Equifax data breach. In other words, if you 
had filed in the distant past, and there was a credit report on you, 
Equifax had all the information about you and your family, your banks, 
your Social Security numbers, and all the rest of it, Equifax ended up 
with a massive breach. Somebody hacked into their computer and stole 
your personal identity information, to the tune of 145 million 
Americans.
  Equifax really felt bad about this. Here is what they said. Equifax, 
in response to this data breach, initially offered a free credit 
monitoring service for any customer who signed up, out of the 145 
million. In other words, we will monitor to see if somebody stole your 
identity, they are misusing it, and hurting your credit status, but 
they added something: as long as the customer signed a forced 
arbitration clause in fine print that prohibited them from joining a 
class action. Equifax wants to help you, even though they initially 
hurt you, as long as you will guarantee that you will never hold them 
accountable in court. How about that for a deal?
  That is what the Republicans are defending tonight, exactly what I 
just described. They feel sorry for Equifax. They feel sorry for Wells 
Fargo. They want to make sure these banks and these credit companies 
really have a friend in the U.S. Senate.
  We don't know if Equifax, which now claims it will no longer impose 
this forced arbitration on victims, will stand by that if they are ever 
challenged in court. We ought to ask ourselves why major groups across 
the United States standing up for just ordinary Americans find this 
Republican strategy on the floor tonight so reprehensible.
  Listen to the groups that oppose this effort: the American Legion, 
the Consumer Federation of America, the NAACP, the United Automobile 
Workers, and many other consumer groups. They are saying: Why won't 
somebody in Washington speak up for the average American who is being 
defrauded by these banks, defrauded by these credit agencies? Why won't 
somebody in the Senate stand up for the agency that finally said enough 
and finally said that these financial institutions have had their way 
long enough?
  Many of these financial institutions are hiding behind your local 
hometown banks. You know the ones I am talking about. I have them in my 
hometown of Springfield, IL. They are saying that this is all about 
your local community banks and your credit unions. We don't want to 
hurt them.
  Here are the facts. Ninety percent of your community banks and credit 
unions do not have these arbitration clauses in their agreements. Do 
you know who does? The big banks. Sixty percent of the big Wall Street 
banks have these clauses, and they are the ones who are really behind 
this fight, the Wells Fargo and the other ones who want to maintain 
this ability to stop consumers from going to court to protect 
themselves when they have been defrauded by banks and credit and 
financial institutions.
  This is a classic illustration of power in Washington. Is there any 
power in the hands of consumers and ordinary Americans? We will find 
out in the vote

[[Page 16429]]

tonight. I am afraid it wouldn't be called on the other side of the 
aisle unless they figured the banks were going to win, again. It is 
unfortunate. We ought to live in a society where consumers have a 
fighting chance, and the system is not rigged against them. An 
arbitration clause is a way to rig a contract so a consumer is going to 
lose twice: lose when the bank takes advantage of them and lose when 
they try to go to court and they are stopped by the arbitration clause.
  Consumers in this country have a battle on every single day to make a 
living and to get by. This is an effort to take away one of your 
freedoms to go to court with a group of people who have been aggrieved 
just like you, have your day in court, win or lose. The Republicans 
want to take that away and so do the banks. I hope they don't prevail.
  I yield the floor.
  Mr. LEAHY. Mr. President, something truly outrageous is happening 
today on the floor of the Senate. The resolution we will consider today 
signals to the American people, in no uncertain terms, that they do not 
deserve the right to seek justice when big banks or other financial 
service providers rip them off, leave their personal information 
exposed to hackers, or engage in discrimination. The resolution of 
disapproval before us today will strip Americans of their rights in 
court and will ensure that corporate wrongdoing can remain shrouded in 
secrecy--all to protect powerful companies like Wells Fargo and 
Equifax.
  Access to our court system is a fundamental principle in American 
society. It ensures that all those who wrong others, no matter how 
powerful, are equal in the eyes of the law and can be held accountable. 
That may no longer be the case. Access to our courts is under assault 
by companies that slip forced arbitration clauses into the fine print 
of agreements for basic services like checking accounts and credit 
cards. For some of these companies, like Equifax, consumers are not 
even their customers. They sell consumers' financial information to 
other companies. They have little incentive to protect consumers or 
even treat them fairly. That is how Equifax can actually make 
significant profits after it carelessly allowed the personal 
information of half of the adult population in the United States to be 
compromised. This is wrong.
  The Consumer Financial Protection Bureau, CFPB, rightly put some 
commonsense limitations on the abuse of forced arbitration clauses. The 
rule provides that financial services companies cannot force consumers 
to sign away their right to join a class action lawsuit. The rule also 
requires more transparency when arbitration is used to ensure that 
wrongdoing cannot be hidden by powerful companies to keep consumers in 
the dark. Protecting consumers in this way should not be controversial.
  With the blunt instrument of a resolution of disapproval, the 
majority is seeking to strike the CFPB's rule and prevent it from ever 
implementing a similar rule in the future. This action, through a 
simple majority vote, would slam the courthouse door shut on every 
American who is ever ripped off by a company like Wells Fargo or has 
their sensitive personal information carelessly left unprotected by a 
company like Equifax. If we go down the path of striking this rule, 
consumers will only be left with the same empty, meaningless apologies 
we always hear from these companies when they are finally caught red-
handed.
  I hope the American people are following this vote today. If they 
want to know whether their Senator stands with them or stands with 
corporate abusers, they will certainly find out. Whose side will the 
Senate be on when the rollcall is taken on this key vote? The American 
people, and their rights as citizens and as consumers? Or the powerful 
corporate interests who are pushing to repeal this protective rule? We 
shall soon see.
  This should not be a partisan issue. We all represent the American 
people. It is time we act like it. The Vermonters I represent are 
watching. They know what is at stake by repealing this rule. I urge 
every Senator who shared my outrage at Wells Fargo and Equifax to take 
a stand and reject this shameful resolution.
  Mr. DURBIN. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. CRAPO. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAPO. Mr. President, while we have a little bit of open time in 
between speakers, I thought I might respond to some of the things that 
have been said.
  Those who are opposing this resolution tonight continue to put it as 
though this were a case of trying to stop consumers from having an 
adequate way to access dispute resolution and make it look like it is 
the big guys against the little guys. First of all, this rule we are 
talking about only applies to financial institutions. It doesn't apply 
in all the other kinds of cases that have been thrown out here tonight. 
If you want to look at the financial institutions that are the most 
concerned about this rule, it is the little guys. It is the credit 
unions. It is the local community banks that are pleading with us to 
stop this abusive rule. I just think that part of the record needs to 
be set straight.
  Again, I am going to lay out what this debate is really about. This 
debate is not about trying to help facilitate banks and credit card 
companies and others in cramming down some solution on consumers. It is 
about trying to facilitate pushing dispute resolution into class action 
litigation. This is a very clear move to drive our dispute resolution 
in this country into class litigation.
  I am going to give a little bit of history, but before I do that, I 
want to again read to the folks who are listening in on this debate 
what this rule exactly does. You would think from all of the debate 
that it stops consumers from going to court or that it forces consumers 
to use an abusive arbitration process. It is very clear. This rule 
prohibits a company from relying in any way on a predispute arbitration 
agreement with respect to any aspect of a class action that concerns 
any consumer financial product or service.
  The rule goes further. Remember that the ones that are the most 
worried about this are the credit unions and the small banks. Every 
agreement they enter into has to contain this language. This tells you 
what the fight is about.
  We agree that neither we nor anyone else will rely on this agreement 
to stop you from being part of a class action case in court.
  That is the rule we are talking about. You may file a class action in 
court or you may be a member of a class action filed by someone else. 
Are we fighting against a mandate--basically, a rule that is going to 
drive decisions and dispute resolutions into class action litigation? 
Yes, we are. We are fighting to protect the current system, which is 
one that has worked for years and years. I am going to get into that 
system. In fact, I will get into it right now. Let's compare class 
action litigation with arbitration as one of the alternatives.
  In fact, before I make that comparison, let me point out that the 
CFPB's own study shows that the clear majority of arbitration clauses 
they studied allow access to small claims court as an alternative to 
arbitration. There is no effort to say to the consumer, if you want to, 
you can go to small claims court. In the United States, the limit in 
small claims is different in each State. It ranges from $3,000 to 
$15,000, but I would say the most common level is about $10,000 of a 
claim. So a consumer who has any kind of a claim up to about $10,000 
can go to a small claims court.
  Let's compare arbitration with class action litigation.
  How much does the consumer recover? In a class action, the average is 
$32 per person. In arbitration, the average is $5,389 per person.
  How long does it take to get the recovery? In a class action, it is 
23

[[Page 16430]]

months, on average. In arbitration, it is 5 months, on average.
  How many of them actually go to trial? Now, this is interesting 
because you think of a class action as your day in court. Remember that 
those who argued earlier tonight were telling consumers they were not 
going to get their day in court. The number of class action lawsuits 
that went to court were zero. Class action litigation is a mechanism to 
drive settlements. As for the number of arbitration suits that went to 
court, 32 percent reached a decision on the merits. That was not an 
actual court case, but it was a resolution by a decision maker. With 
regard to settlements, 12 percent classwide are made. In arbitration, 
57 achieve settlement.
  Here is one of the striking ones. How much is paid in attorneys' 
fees? In a class action, according to this study, which is the CFPB's 
study, $424 million goes to attorneys' fees. There were no attorneys' 
fees under the arbitration. There were some arbitration fees, and I 
will get to that in a minute, but they were nowhere close. By the way, 
this number, the $424 million that went into attorneys' fees, is the 
reason we are having our debate tonight. This rule seeks to drive this 
decision-making model into this zone.
  As for estimated additional class action costs for covered companies, 
it is $2.6 billion for class actions and none for arbitration.
  Some have said this is just an example of the Republicans trying to 
help Wells Fargo out. First of all, I am the chairman of the Banking, 
Housing, and Urban Affairs Committee. We have held hearings on the 
Wells Fargo situation and continue to look at it very closely. Senators 
from both parties take it very seriously and are working to find a 
resolution, but when it comes to the question of whether Wells Fargo 
used arbitration agreements to avoid liability, these are the facts.
  Wells Fargo, which was found to have opened millions of unauthorized 
accounts in the names of its consumers, agreed to settle this for $142 
million--twice as much as the projected consumer loss. They made that 
agreement because arbitrating them in individual disputes would have 
cost much more. The argument that Wells Fargo is the example of what we 
are working to try to facilitate here is just not true.
  As I said, let's talk a little bit about arbitration. On the floor 
tonight, arbitration has been characterized as this terrible, devilish 
idea that has been designed by Big Business in America to try to push 
the little guy out of a fair chance at recovery in a dispute. The 
Acting Comptroller of the Currency, who heads the independent Bureau of 
the Treasury, which is in charge of supervising and regulating national 
banks, has raised serious concerns.
  In his recent letter, he indicates that arbitration can be an 
effective alternative dispute resolution mechanism that can provide 
better outcomes for consumers and financial service providers without 
the high costs associated with litigation.
  That is key. In fact, if you look at history, nearly a century ago, 
Congress made private agreements to resolve disputes through 
arbitration valid, irrevocable, and enforceable under a Federal law, 
which is called the Federal Arbitration Act. This was a decision by 
this Congress nearly 100 years ago that said we have to find a way that 
is fair to resolve disputes that is not so expensive as the current 
dispute resolution models we have, namely, litigation. This 
longstanding Federal policy in favor of private dispute resolution 
serves the twin purposes of economic efficiency and freedom of 
contract.
  Some have said this just lets banks get away with cheating their 
customers, but the opposite is true. Eliminating the use of this tool 
could result in less effective consumer protection and fewer remedies 
while simply enriching class action lawyers. At the same time, the 
proposal may potentially decrease the products and services offered to 
consumers while increasing their costs.
  The Wall Street Journal's editorial board similarly noted that 
arbitration has allowed consumers to easily resolve disputes by phone 
or online without their having an attorney.
  As I have said, virtually every consumer who does not like this 
solution has the alternative to go to small claims court. The question 
here is whether we will facilitate pushing consumers out of the choice 
of arbitration. If the law is changed, which is what this rule seeks to 
do, then the disincentive for financial institutions to rely on 
arbitration will be seriously injured. The worry we have--and the 
intent of this rule--is that it will drive dispute resolution into 
class action litigation. That is what this whole dispute here tonight 
is about.
  One of my colleagues tried to characterize arbitration as this system 
in which this company hires these decision makers, these arbitration 
judges, and that the judges are going to be biased because the judges 
are bought by the companies that use them for the arbitration. That is 
not an accurate description of what arbitration is.
  There is actually a Federal law, which I have already referenced, 
which sets up the parameters in which arbitration operates, and there 
is an American Arbitration Association that administers it. When a 
person chooses to go into arbitration, what happens is that the whole 
system that takes over is administered not by the company but by the 
AAA, and under the American Arbitration Association's procedures, it 
appoints an arbitrator. The implication made earlier was that the 
arbitrator always rules for the company because that is the company 
that hires him.
  Here is the truth. In the appointments of 1,847 disputes that the 
CFPB studied, arbitrators were appointed in 975 that involved 477 
different arbitrators. In 704 of those disputes, the AAA appointed 
arbitrators who had also been in other financial disputes. Some of 
these arbitrators get picked a couple of times, but they are not picked 
by the company, and they are not beholden to the company. That is one 
of the reasons we set up the Federal arbitration system the way it is.
  My point is, the effort to try to characterize this as some devious 
system that has been created to try to stop consumers from having 
access to fairness is simply false. We have a very fair system that has 
been working for over 100 years in this country. It has been litigated 
and litigated because those who want litigation to be the norm hate it. 
They do not want arbitration to work, but the reality is, it has worked 
wonderfully, and it has survived the litigation assaults.
  Now those who want to drive decision making more into the courts and 
more into class action litigation have been able to get a willing, 
listening ear in the Director of the CFPB, who, as I have said earlier, 
has no accountability to Congress, who does not even look to Congress 
for his budget, and is obviously on the side of the litigation bar, 
which wants to, once again, drive our decision-making system into a 
litigation mode.
  That is the debate we are having. That is the argument tonight. 
Anyone who tries to say this is an effort by your local credit union, 
your local community bank, or your large credit card company to try to 
stop consumers from having adequate access to dispute resolution is 
mischaracterizing what the debate tonight is about.
  I encourage all of my colleagues to reject this inappropriate and, 
frankly, expensive and dangerous rule.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I would like to say a few words about 
the battle between the jury system and a system in which regular 
Americans are forced into arbitration, which has a terrible record.
  I can remember years ago, when I was attorney general, the attorneys 
general shut down one of the arbitration systems because it was so 
corrupted and was throwing decisions to big corporate interests, and 
you cannot really understand that unless you understand the importance 
of the role of the jury in our country.
  For centuries, the jury has served as a last sanctuary within our 
constitutional structure for people who seek justice and fair treatment 
under the law. It was designed for a specific purpose. When Big 
Interests control our

[[Page 16431]]

executive officials, as the Founding Fathers knew they could, when 
lobbyists have the legislatures tied in knots, as our Founding Fathers 
knew they could, and when media outlets steer public opinion against 
individuals, as our Founding Fathers saw that they could, the hard, 
square corners of the jury box stand firm against that tide of 
influence and money.
  There is a lot of history here. It was the earliest American settlers 
who brought the jury to our country as precious cargo from England.
  The Virginia Colony established the jury in 1624, roughly a year 
before the Dutch even settled the island of Manhattan. Early Americans 
created juries in 1628 in the Massachusetts Bay Colony, in 1677 in the 
Colony of West New Jersey, and in 1682 in Pennsylvania. Indeed, in our 
Declaration of Independence, our colonists put forward a list of 
grievances and admonished King George III for--and I quote them in the 
Declaration of Independence--``depriving us in many cases, of the 
benefits of Trial by Jury.''
  When the original Constitution was silent on the jury, Americans 
sounded the alarm, and the Seventh Amendment was sent to the States in 
the Bill of Rights.
  Alexander Hamilton, a famous Revolutionary-era Founder, stated in 
Federalist No. 83: ``The friends and adversaries in the plan of the 
convention, if they agree in nothing else, concur at least in the value 
they set upon the trial by jury; or, if there is any difference between 
them, it consists in this: the former regard it as a valuable safeguard 
to liberty; the latter represent it as the very palladium of free 
government.''
  Going on to the mid-19th century, when Alexis de Tocqueville wrote 
his famous ``Democracy in America,'' he observed that the jury should 
be understood in America as a ``political institution'' and ``one form 
of the sovereignty of the people.'' What did he mean? How does the jury 
protect the sovereignty of the people? Well, in two ways, as Sir 
William Blackstone explained.
  Sir William Blackstone was probably the most cited source in those 
early days of the founding of our Republic and in the early days of the 
development of our laws. Sir William Blackstone explained that trial by 
jury ``preserves in the hands of the people that share which they ought 
to have in the administration of public justice, and prevents the 
encroachments of the more powerful and wealthy citizens.''
  Those are two separate thoughts. First, the civil jury devolves a 
share of government power--power which they ought to have--directly to 
the people. But second and uniquely, in a Constitution otherwise 
devoted to protecting the individual against the power of the State, 
the civil jury is designed to protect the individual against other 
individuals--more specifically, against other more powerful and wealthy 
individuals.
  Even former Chief Justice William Rehnquist observed about this era 
that ``the Founders of our Nation considered the right of trial by jury 
in civil cases an important bulwark against tyranny and corruption, a 
safeguard too precious to be left to the whim of the sovereign.''
  That is at heart what this fight is about. Remember Blackstone's 
words: The jury ``prevents the encroachments of the more powerful and 
wealthy'' citizens. That means the jury is intended to be a thorn in 
the side of the powerful and wealthy. It is intended to make the 
powerful and wealthy stand equal--annoyingly equal to them--before the 
law with everyone else. The jury is intended to be the little branch of 
government that the wealthy and powerful can't get to, can't fix, can't 
control. That is why jury panels are new every time. If you had a 
permanent panel of the same jurors over and over, the powerful and 
wealthy would tend to influence the institution. The jury stands 
against all that tide of influence. That is what it is there for. That 
is how it was designed. Who is more powerful and wealthy today than 
mighty corporations and big special interests? And guess what--big 
corporations and special interests hate the jury. The small institution 
has big enemies.
  It would astound the Founding Fathers to see how far we have fallen 
from the popular affection and loyalty for the jury trial in 1776. 
Juries are indeed about dispute resolution and about making sure that 
everybody can get a fair shake and that powerful and wealthy interests 
can't put the fix in, but more than that, the civil jury helps check 
power.
  The American system of government is built on the premise that 
divided government and separated powers--checks and balances--will best 
protect individual liberty. The civil jury distributes authority of the 
State directly to citizens, giving them direct power to resolve 
disputes--sometimes very important disputes--and it gives them this 
power in a way that makes it very hard for special interests to 
control.
  Well, if we look around today, the influence of wealth and power 
suffuses the legislative and executive branches. Corporate lobbying and 
corporate and billionaire election spending are at unprecedented 
levels. In our political debate, dark money dollars drown out the 
voices of average citizens in what has been called ``a tsunami of 
slime,'' and all that money is not spent for nothing.
  Powerful interests love a game that is rigged in their favor--always 
have, always will. It is a tale as old as time. Well, rigging the game 
doesn't go over well in the jury box. Special interests may seek 
special influence with legislators and regulators all of the time. It 
is their constant activity, licensed and regulated by lobbying and 
campaign finance laws. Their every waking moment is devoted to 
tampering with the legislative and executive branches, but tampering 
with a jury is a crime, and it is a crime for a reason.
  In a world where so many feel powerless, juries give regular citizens 
real authority. In a world of fractious partisanship, juries make 
citizens work together and decide together. And in a world in which 
injustices pile up against barricades of well-kept indifference, a jury 
can blow the status quo to smithereens. This is the vital 
constitutional role of the civil jury. This is what mandatory 
arbitration is designed to attack--to remove the access of regular 
citizens to this institution of our government which was so important 
to our Founding Fathers because it is an institution that the wealthy 
and powerful cannot control. They can control mandatory arbitration. 
Over and over again, it has been shown to be subject to corporate 
favoritism and control. There is a reason that the big and powerful 
special interests want to get rid of access to a jury and want to force 
people into mandatory arbitration. They are not doing it for the sake 
of having their adversaries and opponents get better access to justice; 
they are doing it to shut off access to the civil jury. They want 
everybody forced into rigged games.
  We ought to be fighting to preserve and enhance the civil jury as an 
element of the uniquely American system of self-government. Our 
forefathers fought and bled and died to create and preserve this system 
of government in which the civil jury has a vital role. From Alexander 
Hamilton to Alexis de Tocqueville, to William Blackstone, to William 
Rehnquist--you can go on and on in our history with people who have 
pointed out the vital role of our jury. Squelching it is the task of 
the wealthy and powerful, mighty corporations that seek to squelch it 
and force everybody into corporate-friendly, mandatory arbitration.
  We should think on this question in the long view--not who gets the 
immediate benefit of not having to face trained lawyers, not having to 
face people in an open forum, not having to be before a free and 
independent jury. We should think of the message of our Founding 
Fathers, who put the need for a civil jury right into the Declaration 
of Independence, who demanded it as part of our Bill of Rights, and who 
saw it as an essential element of our liberty.
  With that, I yield.
  I see my distinguished colleague from Maryland.
  The PRESIDING OFFICER. The Senator from Maryland.

[[Page 16432]]


  Mr. VAN HOLLEN. Thank you, Mr. President.
  I want to start by thanking my friend and colleague from Rhode Island 
for pointing out why we have a jury system, a system of our peers who 
can listen to all sides of an argument in a fair way and render 
justice.
  What this resolution does is prohibits many consumers around the 
country from having the choice of going before a jury as part of a 
group of people who have been wronged.
  For months, the American people had been hearing stories of how big 
banks, big financial institutions, have engaged in various schemes that 
harmed consumers and cheated consumers out of millions and millions of 
dollars. The most notorious recently, of course, was the case of Wells 
Fargo, which opened up a lot of fake accounts--meaning they opened 
accounts without consumers asking them to open accounts--and then 
charged consumers for those accounts. It is a fact that Wells Fargo in 
many cases tried to use forced arbitration to prevent those people who 
had been wronged from getting access to justice, from being compensated 
for their harm.
  We also heard about the Equifax case. Equifax is a credit reporting 
agency. They collect gobs of information on all of us--on over 170 
million Americans--without our permission. We don't say: Equifax, go 
out and dig up as much information about us as you can and put it on 
your computer system. They go out and do it. We all know that they were 
subjected to a massive hack and that very confidential, highly personal 
information on over 100 million Americans has now been compromised.
  One of the things Equifax did after that was they said to consumers: 
You know what, we know that your information may have been compromised 
because of this hack on our system, and we want to help protect you, 
but if you want our protection, you have to sign away your rights to be 
part of a class action lawsuit against us.
  That was their original plan and their original instinct. Well, there 
was a big public outcry about that, and they backed off. But the former 
CEO of Equifax, in a Banking Committee hearing just a few weeks ago, 
said they backed off in response to the public outcry, but if they had 
done business as usual, they would have prevented those consumers from 
getting compensation for wrongs through the court system.
  Even after we hear about Equifax and that scandal and the Wells Fargo 
banking scandal, we are here on the floor of the Senate not to help 
even the playing field for consumers but to take away a right that 
consumers now have to help even the playing field against these big 
banks and financial institutions. It is entirely backward.
  I want to read from the statement that was issued by the Consumer 
Financial Protection Bureau, the CFPB, on July 10 of this year when 
they issued their new rule. Here was the headline: ``CFPB issues rule 
to ban companies from using arbitration clauses to deny groups of 
people their day in court.'' Simple as that. It went on to say that 
financial companies can no longer block consumers from joining together 
to sue over wrongdoing. It pointed out that companies use mandatory 
arbitration clauses to deny groups of people their day in court. They 
went on to say that many consumer financial products, like credit cards 
and bank accounts, have arbitration clauses in their contracts that 
prevent consumers from joining together to sue their bank or financial 
company for wrongdoing. That is right. We all know that in the fine 
print of a lot of credit card applications, in the fine print that 
consumers get from a lot of big financial institutions, and in the fine 
print of auto loans, they have buried these provisions that compel 
those consumers to give up their rights.
  This is not a question--I have heard conversations on the floor 
today--about whether arbitration in and of itself is a good or a bad 
way to resolve disputes. If I have been wronged or you have been 
wronged and you agree voluntarily to enter into an arbitration dispute 
mechanism, fine. Do it voluntarily. That is not what this is about. It 
is not what it is about at all.
  This is about forcing arbitration. We listened to the CEO of Wells 
Fargo. We listened to the former CEO of Equifax. They all say they 
value their consumers. They want to make sure they do right by their 
consumers, but it turns out they don't trust their consumers at all 
because they want to take away from those same consumers the right to 
seek justice through the court system if that is what those consumers 
choose to do. That is exactly why the Consumer Financial Protection 
Bureau took the action it did to protect consumers and to make sure 
that they could not be compelled into arbitration. If they chose it 
after they had been wronged, that is their decision, but this is about 
mandatory arbitration and forcing consumers to give up their rights.
  We have heard a lot about the Washington swamp. This resolution to 
overturn this consumer protection provision is the Washington swamp at 
its muckiest and at its smelliest.
  Now, I have a letter I received today from the American Legion, 
people who have represented men and women who have served our country. 
Here is what it says. This is from the legislative director at the 
American Legion:

       Dear friends and colleagues, I write to reiterate the 
     American Legion's strong support for the Consumer Financial 
     Protection Bureau arbitration rule in light of reports that 
     the Senate could vote on the matter as early as this evening.

  The alarm bells went up at the American Legion and other places.

       You may recall that I emailed you about this on October 2. 
     That email is below, but today I want to share a couple of 
     additional points.

  Point No. 1 is in bold.

       A vote to overturn the Consumer Financial Protection Bureau 
     arbitration rule is a vote against our military and veterans.

  That is from the American Legion.
  I want to read some of the other veterans organizations that are 
against this action that the Senate is headed toward tonight: Blue Star 
Families, Military Order of the Purple Heart, the National Guard 
Association of the United States, National Military Family Association, 
Reserve Officers Association, and the list goes on and on. They are 
joined by consumer protection groups.
  Here is what the American Legion said in their October letter to 
every Member of the Senate. It says that the Consumer Financial 
Protection Bureau's rule on arbitration agreements addresses the 
widespread harm of forced arbitration by restoring the ability of 
servicemembers, veterans, and other consumers to join together and seek 
relief in class action lawsuits when financial institutions break the 
law.
  The American Legion summed it up just perfectly here. They pointed 
out that the Consumer Financial Protection Bureau put forward a rule 
that said that veterans who have been wronged or cheated can join 
together to seek justice in the court system and that other consumer 
groups can as well. I have heard a lot of talk today about people 
saying: You know what, we actually passed this law a little while ago 
that would protect servicemembers and that would allow servicemembers 
to band together to seek justice.
  Well, I have two points. One is the American Legion and all of these 
veterans groups, they don't think that was good enough, and they are 
appalled at what the Senate is thinking about doing tonight.
  The second question is this. Yes, we should protect our veterans, but 
why shouldn't we also be protecting all of the other consumers around 
the United States of America? Why shouldn't they be able to seek 
justice? Why should they be compelled to go to arbitration when they 
would rather choose to go through the court system?
  We have heard fellow Members talk about why the deck is stacked 
against individuals. Just think about it. You get cheated by your bank. 
Maybe it is 100 bucks, or maybe it is 500 bucks. You get on the phone, 
and you know you are put on there forever. You are put on hold. You are 
put on hold, and you finally get through. You get somebody. Maybe they 
pass you to somebody else or maybe you get dropped in the process. But 
at the end of the day, in order

[[Page 16433]]

for you to get your money back when they have been wronged, under this 
provision, the old provision, you would have to go to arbitration and 
you would have to shell out a lot of money, and the big banks know 
that. So what they fear is that all of us, as consumers who have been 
cheated, we have a chance to get together. It is a class action. It is 
when everyone who has been wronged can get together and actually have a 
little bit of power and leverage against a big bank, whether it is 
Wells Fargo or Equifax or whoever it may be. That is the whole idea of 
a class action. People get to band together, and that is what the 
American Legion is asking the Senate to do--to let veterans band 
together but also just to let American consumers band together to seek 
justice.
  I just want to share with the Senate a story about one of my Maryland 
constituents and what happened to one of my Maryland constituents 
because I think a lot of people can relate. This is a pretty 
extraordinary story, but they can relate to how one individual feels 
like when they are fighting against a big organization. This was a 
story that was reported on NPR, and the Maryland constituents' name is 
Michael Feifer.
  Here is what happened. One morning in February, Michael Feifer was 
heading off to his job in Maryland at a company that builds guitars. He 
walked to the spot where he parked his car. His car wasn't there, and 
so he called the police. He called the police. He said: I was livid. I 
thought someone stole my car.
  Well, somebody had made off with Feifer's car, but it wasn't a car 
thief. It was Wells Fargo Bank. The police informed him of this when he 
called them up, and Michael Feifer said: That is when I found out my 
car was repossessed.
  Now, he had no idea why Wells Fargo wanted to repossess his car. He 
says his payments were automatically taken out of his checking 
account--his car payments. So he called Wells Fargo, and he found out 
that the bank had put another insurance policy on his car. Lenders 
sometimes do this when a borrower doesn't have insurance. Wells Fargo 
calls it collateral protection insurance, CPI. Now, sometimes there is 
nothing wrong with that, but Wells Fargo imposed this insurance on 
nearly half a million people who already had bought insurance. They 
were already covered. Wells Fargo just decided to put another insurance 
plan on them and--guess what--started charging them for it.
  So that is why right after Feifer's car got repossessed, Wells Fargo 
told him that he had been marked delinquent for not paying his 
insurance. Now, this again was insurance he didn't want and he didn't 
need. Well, they said: Too bad, you owe us $1,500.
  Now, Michael Feifer then showed up at the bank with his bank 
statements and showed all the payments he had made for the vehicle. He 
showed proof of insurance showing that he never had a lapse in his 
insurance, and he says the people at the bank said: Well, you shouldn't 
owe anything; it is not your fault. He said: They were just as confused 
as I was.
  Well, then, he said the branch employees tried to be helpful. They 
called up the Wells Fargo department that dealt with the details of car 
repossessions to find out what was going on, and they kept putting them 
on hold. So this is the Wells Fargo department putting their own Wells 
Fargo's branch folks on hold. He was there 2\1/2\ hours, and then it 
turns out they told him to call back a couple of days later.
  Well, he called back a couple of days later, and they said there was 
no prior record of his calls to the bank. He said they were very rude 
to him. Then, while he was arguing with the bank, they said: We have 
repossessed your car. If you don't pay us 600 bucks, we are going to 
sell it off. So he paid them 600 bucks. Then he found out that he 
wasn't alone and that Wells Fargo had also engaged in this scheme to 
sell people car insurance as part of their car loans when they already 
had insurance.
  So this is a very simple issue. The issue is whether or not consumers 
who have been wronged by big banks or other financial institutions can 
choose to band together with others to seek justice. What the Consumer 
Financial Protection Bureau did was to say that consumers have that 
right. They have the right to choose how to go about getting justice.
  What this Senate resolution does is to take that right away from 
consumers and says: If you want to seek justice, you can only go 
through forced arbitration, where we know the deck is stacked against 
the lonely consumer and stacked in favor of the big banks and the big 
financial institutions.
  Let's not do that. Let's vote down this resolution. Let's protect the 
consumer protections that are in place today.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. UDALL. Thank you, Mr. President, for the recognition this 
evening.
  Mr. President, I rise to support the Consumer Financial Protection 
Board's arbitration rule that has been spoken about this evening very 
eloquently by my colleagues here on the Democratic side.
  The new rule protects consumers from predatory financial practices. 
These consumers are our everyday constituents. They are servicemembers 
and veterans, moms and dads, the elderly, students, and working people. 
It protects these folks by limiting binding arbitration clauses.
  Now, what is a binding arbitration clause? These clauses take away 
consumers' rights to seek relief in court when they are wronged. This 
rule puts money in the pockets of consumers who have been taken 
advantage of.
  The Consumer Financial Protection Board estimates that the rule will 
mean $342 million per year in compensation to consumers. Repealing the 
rule would take that money, which should go to consumers, and give it 
to some of the wealthiest corporations in this Nation.
  When millions of consumers are scammed, what is the most logical 
remedy? When millions of consumers are scammed, what is the logical 
remedy--millions of separate cases before arbiters selected by the 
corporation or a class action case before an impartial judge and jury?
  The right to go to court before a jury of your peers is enshrined in 
the Constitution. The Seventh Amendment states:

       In Suits at common law, where the value in controversy 
     shall exceed twenty dollars, the right of trial by jury shall 
     be pre-
     served. . . .

  Now, let's talk about the Seventh Amendment and what one of our 
Founders said. James Madison wrote:

       Trial by jury in civil cases is as essential to secure the 
     liberty of the people as any one of the pre-existent rights 
     of nature.

  This rule guarantees access to our impartial courts. It is always 
good to have the spirit of the Constitution and the Founders on your 
side.
  I stand with the supporters of this rule. Who are they? There are 
many. For example, there is the American Legion. Just today, its 
legislative director wrote in no uncertain terms:

       A vote to overturn the CFPB arbitration rule is a vote 
     against the military and veterans.

  The Military Coalition, representing 5.5 million servicemembers, also 
supports this rule. In July, they wrote: ``Forced arbitration is an un-
American system wherein servicemembers' claims against a corporation 
are funneled into a rigged, secretive system in which all the rules, 
including the choice of the arbitrator, are picked by the 
corporation.''
  These are incredibly strong statements of opposition from military 
and veterans groups. Also in July, over 300 consumer, civil rights, 
labor, and small business groups wrote: ``The rule . . . is a 
significant step forward in the ongoing fight to curb predatory 
practices in consumer financial products and services and to make these 
markets fairer and safer.''
  Signers of this letter include the AFL-CIO, the American Federation 
of Teachers, Consumers Union, the NAACP, LULAC, and dozens of other 
organizations.
  Conservatives also support this rule. One of the early tea party 
activists, Mr. Judson Phillips, wrote an op-ed in the Washington Times. 
He said: ``This

[[Page 16434]]

time, the CFPB is right and the Republicans should stand on the side of 
American citizens and protect the Constitution and the Seventh 
Amendment.''
  Where are our Republican friends? They are not here on the floor 
talking about this rule.
  Finally, the American people broadly support this rule. A recent poll 
showed 67 percent supported the rule; only 13 percent opposed it. So 
who opposes this rule and who is behind this resolution to repeal it? 
Corporations that want to avoid penalties in court when they abuse 
their customers and big financial industry trade associations and 
lobbyists.
  It would allow credit card, student loan, and payday lending firms--
which would see big benefits if this resolution passes--to keep forcing 
consumers to sign contracts that take away their right to go to court.
  Wells Fargo, one of the largest banks in America, spent years 
creating millions of fake accounts, just to bill their own customers 
more fees. They eventually admitted a complete and total fraud of epic 
proportions. Equifax, one of the largest credit bureaus in America, 
allowed over half of all American consumers' personal information to be 
hacked. These companies should not be able to use binding arbitration 
to avoid the legal consequences of their actions. Today's debate is a 
perfect example of how policymaking in Washington is broken.
  A Federal agency did what is required. It undertook an exhaustive 
study and created a rule to protect consumers from abusive contracts. 
Now the affected industry is spending millions on lobbying and public 
relations to repeal the consumer protection rule--to protect their 
bottom line at all costs.
  This vote will decide the fate of $342 million per year. Should it go 
to consumers who were wronged? Of course, it should. Or should it stay 
with the corporations that committed those wrongs? Of course, it should 
not.
  Congress is not popular these days. Americans overwhelmingly believe 
special interests and lobbyists have too much power compared to the 
regular people. Today, we can take a step to repair our reputation. We 
should side with our constituents on this important vote and reject 
this resolution. I urge a ``no'' vote.
  I yield back.
  The PRESIDING OFFICER (Mr. Rounds). The Senator from Illinois.
  Ms. DUCKWORTH. Mr. President, I come today to speak out in opposition 
of this misguided effort to overturn the Consumer Financial Protection 
Bureau's arbitration rule, which protects the rights of consumers and 
protects our brave servicemembers and veterans from being taken 
advantage of by unscrupulous financial institutions.
  It was only a couple of weeks ago that we had the CEO of Equifax here 
on Capitol Hill, testifying about how his company had failed to protect 
Americans' private financial information and put more than 140 million 
consumers at risk of fraud or worse. That wasn't too long after we had 
the CEO of Wells Fargo here, testifying about how his company had 
defrauded millions of consumers by forcing them into accounts and fees 
they had never signed up for and, certainly, had not agreed to.
  The American people were outraged by these scandals, and with good 
reason. Both of these companies had committed serious wrongdoings, and 
they admitted it. But that still didn't stop either from trying to 
shield themselves from the legal liability their own actions had 
risked.
  Both of these companies tried to prevent the people they had taken 
advantage of from holding them accountable in court by using what is 
known as forced arbitration clauses. They thought--and it seems they 
were right--that if they could stop people from suing them for their 
wrongdoing and, instead, force them into private arbitration that 
heavily favored megabusinesses at the expense of consumers, they would 
have a better shot at saving money for their company. They didn't care 
about consumer rights or even justice. They just wanted to make as much 
money as they could--legally or illegally--and then get out of Dodge as 
cleanly as possible.
  But because the American people were so outraged by these scandals, 
we noticed what they were trying to do. The actions of both companies 
caused an uproar that ultimately led them to back down and ensure that 
American consumers didn't have to give up their right to a day in court 
just for doing business with these companies. Those sorts of forced 
arbitration clauses were exactly what the CFPB was trying to stop when 
it implemented the rule my colleagues on the other side of the aisle 
are trying to repeal tonight. Wells Fargo's and Equifax's attempts to 
force consumers into mandatory arbitration clauses should have been a 
lesson, but I guess those working to reverse this rule here tonight 
didn't learn it.
  It is common to hear stories throughout my State of Illinois--and 
throughout the military community--of servicemembers being taken 
advantage of through predatory loans, scams, abuses, and fraud. That is 
because Active-Duty servicemembers are particularly vulnerable 
consumers, especially when they are deployed. They get a guaranteed 
paycheck, but they also have limited time to read their credit card 
statements and keep up with security breaches to see if their 
identities have been stolen. They are too busy carrying out their 
mission.
  Servicemembers are also frequently on the move between deployments 
and base relocations, often separated from their spouses and their 
families for long periods of time. Despite that, they still need to 
wire money when emergencies happen. They still need to pay bills, and 
their focus isn't always on whether a loan they took out has hidden 
fees or if a company is charging them a higher rate than they are 
supposed to. What they are focused on, and rightly so, is carrying out 
their mission, often in places like Afghanistan.
  Corporations and scam artists know this, and they take advantage of 
it. The CFPB's forced arbitration rule could help protect our 
servicemembers from this sort of abuse. It seems that a few of my 
colleagues want to make it harder for military families to get by, and 
that is a shame.
  Abusive corporate practices, left unchecked, not only cause 
incredible financial difficulty for servicemembers and their families, 
but they also have national security implications, directly impacting 
military readiness. In the military, bad credit can affect your 
security clearance and advancement. When the DOD loses qualified 
servicemembers because of financial instability, they also lose mission 
capability and the significant investments made in that person's 
training. This is an expensive loss. DOD estimates that each separation 
from service costs taxpayers more than $57,000.
  Corporate abuse also causes personal difficulties. When someone is 
deployed, the last thing they should have to worry about is whether 
their house is going to be foreclosed on or their car is going to be 
repossessed because they were a victim of a scam. When they are going 
to battle or heading out on a mission, the last thing our troops should 
be thinking about is how a company took advantage of the fact that they 
were out of the country--and how there is so very little they can do 
about it
  Unfortunately, this isn't a hypothetical issue. Servicemembers get 
taken advantage of all the time, and we have seen countless times how 
their ability to file lawsuits holds bad actors accountable. Not too 
long ago, the banks Santander and Wells Fargo paid tens of millions to 
resolve lawsuits that were filed because they were illegally 
repossessing servicemembers' cars. JPMorgan Chase paid $27 million to 
settle a lawsuit from servicemembers who were being overcharged for 
mortgages. And student loan servicer Navient paid 78,000 servicemembers 
$60 million after overcharging them on their student loans. In each of 
these instances, servicemembers, sometimes with the help of government, 
filed a lawsuit to get relief and hold these financial actors 
accountable. When companies force our servicemembers--or any consumer--
into arbitration, military families lose the right to hold wrongdoers 
accountable.

[[Page 16435]]

  That is what happened to Archie Hudson, a disabled veteran, father of 
two, and husband from Waynesboro, MS. A few years ago, Archie requested 
a loan from Wells Fargo to replace his home's windows. Instead, he 
received a Wells Fargo credit card along with sky-high interest rates 
and a forced arbitration clause hidden in the fine print. He didn't 
realize it at the time, like the millions of others that Wells Fargo 
scammed, but it ultimately helped to ruin his credit. When Archie tried 
to get his day in court, he was, instead, forced into an arbitration 
proceeding that favors lenders over consumers. He is not alone. The 
vast majority of people who have been forced into arbitration could 
tell you that the system is rigged.
  When the CFPB first looked into this issue, they found that when 
consumers file an arbitration claim against a company that takes 
advantage of them, they have to pay an average of $161 in filing fees, 
and they almost always lose.
  Companies, on the other hand, won a whopping 91 percent of the time 
that they go into arbitration against consumers. On average, the 
consumer then had to pay $7,725 in damages to further pad corporate 
profits.
  Banks sometimes try to defend these clauses by saying that the 
reduced legal liability helps them reduce costs for consumers, but 
there is absolutely no evidence that is true. In fact, when companies 
have added these forced arbitration clauses in the past, the evidence 
suggests that they never reduce costs for consumers. These clauses 
simply mean bigger profit margins for those banks that break the law.
  There is a reason so many military veterans service organizations 
like the American Legion, the Air Force Association, the Marine Corps 
League, the National Guard Association, the Vietnam Veterans of 
America, and groups like the AARP oppose this effort. Remember, 
arbitration isn't about saving lawyers' fees or decreasing costs to 
consumers. It is there to protect the interests of banks over 
consumers.
  Look, I am not naive. I get that companies--especially banks--are in 
the business of making money. It makes sense that they would want to 
force all their customers into arbitration because that saves them 
money. But why on Earth would my colleagues in the Senate go along and 
help them rob servicemembers and consumers of their rights to go to 
court? Why would we allow bad actors to get off scot-free?
  If they believe that our servicemembers are unfairly getting rich off 
suing companies that wrong them, they should say that. If they believe 
companies that break the law should be shielded from having to answer 
for their illegal actions in court, they should say that. We shouldn't 
let them hide behind cutting regulations. I am all for cutting needless 
redtape, but the arbitration rule is an example of a regulation that 
actually helps Americans. It helps our servicemembers and our military 
families.
  A vote to overturn the arbitration rule is a vote against our 
military and against those who wake up every single day to serve and 
protect the greatest Nation on the face of the Earth.
  Thank you.
  I yield back.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. BROWN. Mr. President, I ask unanimous consent that following my 
remarks of no more than 2 minutes, Senator Franken follow me, and then 
Senator Blumenthal.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN. Mr. President, I just want to make an observation after 
listening to the words of my friend Senator Duckworth, who speaks, as 
Holly Petraeus and so many others have spoken, about the importance of 
this rule to veterans in this country.
  It is not just consumers. It is not just women who have been abused 
in the workplace. It is not just people who sign up for credit cards. 
It is veterans in this country who are the losers if this vote passes 
tonight.
  I would first like to read the number of Democrats who have been on 
the floor in opposition to this motion in support of the rule. I 
started, then Senator Merkley, Senator Warren, Senator Hirono, Senator 
Durbin, Senator Whitehouse, Senator Van Hollen, Senator Udall, Senator 
Duckworth, soon after, Senator Franken, and Senator Blumenthal.
  On the other side there has been one Senator. Senator Crapo is a good 
friend of mine. He is chairman of the committee. I am the ranking 
member. He is doing his duty and defending his position well. But no 
other Republican Senator, no supporter of this resolution--nobody wants 
to come down here and speak. Why? Because they don't want to be seen as 
defenders of Wall Street. They don't want to be seen as defenders of 
the most powerful people in this country. So they stay back in their 
offices quietly.
  They will come down here meekly on the floor, and they will vote yes, 
and they will go home and hope nobody knows about it. But they are not 
willing--again, Senator Crapo, whom I admire and respect greatly, knows 
those aren't just words. I mean it. He is doing his duty as chairman of 
the Banking Committee. None of the rest of them want to join him. I 
think that tells you a whole lot.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. FRANKEN. Mr. President, I rise to discuss the Consumer Financial 
Protection Bureau's recently finalized rule to limit the use of 
predispute, forced arbitration clauses in contracts for financial 
services and products. I strongly oppose the Congressional Review Act 
resolution to dismantle this vital consumer protection.
  Forced arbitration clauses force individuals to sign away their right 
to go to court as a condition of buying a product or a service, and 
they allow corporate America to take advantage of a shadow justice 
system that is inherently biased toward the corporation and offers no 
meaningful appeals process. To put it bluntly, these clauses serve one 
purpose and one purpose alone, to help make sure the giant corporations 
still come out on top if they have wronged consumers.
  Thankfully, we started to make some progress in addressing forced 
arbitration. Five years ago, the Consumer Financial Protection Bureau 
began an intensive study of forced arbitration clauses in consumer 
financial services contracts for things like credit cards, savings 
accounts, and private student loans. The study confirmed that forced 
arbitration stacks the deck against consumers and in favor of powerful 
corporations. Of the 341 reviewed cases of forced arbitration in which 
consumers made claims against financial institutions, the CFPB found 
that consumers obtained relief in just 32 disputes. That is 32 out of 
341--9 percent of the time.
  By contrast, of the 244 cases of forced arbitration in which 
companies made claims against their customers, the companies obtained 
relief in 227 of them or 93 percent of the time. For the consumers who 
did obtain relief, the CFPB found they won far less than they had 
claimed, while the companies that obtained relief recovered nearly the 
entirety of their claim.
  The study also demonstrated how giant financial institutions have 
learned to pair forced arbitration clauses with class action bans to 
shutter the courtroom doors on groups of individuals with small claims. 
Once blocked from going to court as a class, most people drop their 
claims entirely because they lack the financial means or will to fight 
a corporation in arbitration as an individual, where outcomes are 
seemingly predetermined in favor of the corporation.
  Although millions of financial consumers are covered by forced 
arbitration clauses and class action waivers, the CFPB found, on 
average, that only 25 consumers with claims of less than $1,000 pursue 
arbitration annually. Think about it. That is just license for 
corporations to rip you off $20, $30 at a time. It is license.
  Finally, forced arbitration is shrouded in secrecy, which 
shortchanges current and prospective customers of information that may 
affect their financial decisions. Between confidentiality requirements 
contained in many forced

[[Page 16436]]

arbitration agreements and the secretive nature of the arbitration 
proceeding itself, financial institutions use force arbitration 
agreements to shield themselves from accountability to the courts and 
to the public eye.
  Let's take the Wells Fargo scandal. Just last year, the public was 
shocked to learn that over the course of 5 years, Wells Fargo employees 
had been incentivized to open millions of sham accounts in the names of 
Wells Fargo customers, including over 31,000 in my State of Minnesota. 
Then the bank charged the customers for those accounts without their 
permission. One reason this fraudulent practice was able to continue 
for so many years is because Wells Fargo's customer account agreement 
included and continues to include, yes, a forced arbitration clause.
  When customers discovered and attempted to sue Wells Fargo for the 
sham accounts, the company forced them into arbitration, having 
successfully argued that any dispute arising from the sham account was 
covered by the arbitration clause in the agreement for the real 
account.
  Let me say that again. Wells Fargo successfully argued that any 
dispute arising from the sham account was covered by the arbitration 
clause in the agreement for the real account. That is what we are 
voting on here.
  If these claims--some of which date back to 2013--had been able to 
proceed to court rather than in private, forced arbitration, other 
Wells Fargo customers would have been alerted to the wrongdoing and may 
have been able to save themselves and thousands of others from being 
ripped off and prevented damage to their credit. That really matters to 
people. A bad credit score can mean the difference between getting a 
mortgage and not getting a mortgage, getting a car loan or not, or even 
getting a job or not
  Fortunately, a few months ago, the CFPB issued a rule to ban 
financial institutions from preventing their customers from banding 
together to seek justice in a public court of law. This is good news 
for consumers who have been scammed by payday lenders, debt relief 
companies, or big banks like Wells Fargo; it is good news for our 
servicemembers and veterans who wish to vindicate their rights under 
the Servicemembers Civil Relief Act; and it is good news for small 
businesses, community banks, and credit unions that have been forced to 
compete with powerful corporations that are pocketing billions in 
stolen money from consumers.
  Let's be very clear about what the rule doesn't do because I think 
there has been some misinformation put out there. The rule is not about 
banning arbitration altogether, and the rule does not prevent a 
consumer from pursuing arbitration if he or she wants to, assuming the 
corporation also wants to go to arbitration. Instead, the rule simply 
takes the ``forced'' out of ``forced arbitration'' and gives the 
consumers a real choice again to pursue a claim of wrongdoing in 
arbitration or band together with similarly harmed consumers to seek 
justice in a public court of law.
  Now the big banks and financial institutions--including Equifax, the 
massive credit bureau that put 143 million Americans' private 
information at risk--are trying to kill the rule, and they are far too 
close to getting their way.
  As long as I have been in the Senate, I have been fighting to end 
forced arbitration. I have always said my efforts are about reopening 
the courtroom doors because they should never have been closed in the 
first place.
  I urge my colleagues on both sides of the aisle to see the CFPB's 
rule for exactly what it is, a commonsense way to restore transparency 
and accountability in our Nation's financial system and to level the 
field between Wall Street and consumers. We must allow the CFPB to move 
forward in implementing this critical consumer protection.
  I ask you to please join me in showing strong support for the CFPB's 
rule, knowing what is in the rule, knowing what this is about, and then 
opposing the special interests that are attempting to take this rule 
away.
  Thank you.
  I yield the floor to the Senator from Connecticut.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. BLUMENTHAL. Mr. President, I am honored to follow my colleague 
from Minnesota, who has made many of the same arguments very eloquently 
that my colleagues have made as we approach a vote literally in the 
dead of night. There is a reason for the timing of this vote.
  My Republican colleagues would much rather have it done past the 
deadline for the newspapers, out of the public eye, because most 
Americans would be repulsed by the idea that they are losing 
fundamental rights, and what could be more fundamental than the right 
to go to court. That is the right that will be lost to countless 
Americans if this vote in favor of S. J. Res. 47 succeeds tonight. It 
would literally repeal the Consumer Financial Protection Bureau's 
arbitration rule using the Congressional Review Act.
  Most Americans will discover this repugnant step when they go to 
their lawyer's office, and they state their grievance, their harm, 
their cause of action, and their lawyer looks at a contract or some 
other piece of paper, which has in fine print a forced arbitration 
clause. That forced arbitration clause, in effect, blocks the 
courthouse door. It denies them their day in court. It compels them to 
go before a group of people--often, the majority selected by the big 
company they want to sue. At best, the result is to give them less to 
remedy the wrong against them than they suffered in harm.
  Often, the lawyer will say: You know, this effort is going to cost 
you more than you will gain. In good consciousness, I must tell you 
that you will not recover as much as you have to pay me, and that is 
because those consumers cannot join together in arbitration as they can 
in a class action. Often, it is because the cost of going to court 
individually, even if they win, will be more than they would gain in 
arbitration. It is done in secret, when their case is arbitrated, so 
others cannot be warned about a similar harm in a product or a service 
they are about to purchase and suffer the same harm or wrong.
  A vote in favor of this resolution is a vote in favor of predatory 
lending. It is a vote in favor of wage theft. It is a vote in favor of 
sexual harassment. It is a vote in favor of medical malpractice. It is 
a vote in favor of denying millions of Americans a fundamental right to 
a day in court.
  Without the promise of justice from the courts, few consumers can 
even think about undertaking the cost of an attorney or take on the 
tremendous effort of bringing those individual actions against service 
providers.
  The harm falls, tragically, particularly on our veterans. I commend 
and thank Holly Petraeus for her profoundly significant work to alert 
our veterans and all of us to those harms. These abusive practices harm 
our veterans more than others because they trust the abusive pitches 
that come at them as they are about to leave Active Duty or sometimes 
while they are on Active Duty or shortly after they leave. They have no 
control over where they are deployed or even where they are based, but 
the con artists and big corporations can come after them. They know 
where they are. They are targets of opportunity.
  In one stunning example--just to give one--documented by the New York 
Times not long ago, a sergeant in the Army National Guard who was 
serving in Iraq said that men came to his house and improperly 
repossessed his car, threatening his wife with jail time if she didn't 
give them the keys. Appallingly, this sergeant received no restitution. 
His case was discarded because his contract with the auto lender 
included a forced arbitration clause. That is the practical harm 
resulting from these causes.
  Wells Fargo has been mentioned as an example of how contracts, in 
effect, are forced on people without their knowledge for accounts, 
contracts for insurance that were put on their loans without their 
knowledge.
  Equifax, in the height of arrogance--the remedy offered to consumers 
had a

[[Page 16437]]

forced arbitration clause as part of their acceptance of a remedy for 
the harm done by Equifax itself. You can't make this stuff up. You 
cannot create the fiction that matches this reality for abuse and harm 
to consumers.
  Repealing this rule strips consumers of one of their only avenues of 
relief from careless negligence or a slow response to harm. In the case 
of Equifax, unfortunately, it probably will not be the last.
  The CFPB rule draws a line in the sand. It puts consumers on a level 
playing field. It eliminates a provision that in law school was often 
identified as a contract of adhesion, where one side has such power 
over the other that they can dictate the terms, inherently unfairly, to 
the consumer. It demands that those consumers be treated fairly.
  Repealing this rule would allow companies like Equifax and Wells 
Fargo to have their run of the contracts in America, repeat the harms 
that have caused such widespread consumer harm, and let them off the 
hook. I urge my colleagues to reject this dangerous rollback of rights. 
It may be welcomed by some corporations, but in their hearts, as well 
as their minds, the vast majority of companies want to do the right 
thing. The outliers are the ones supporting this rule.
  It would not eliminate arbitration where both sides feel it is in 
their mutual interests; it would simply eliminate that fine print that 
enables those rip-off clauses that harm our veterans--people who fight 
for our fundamental rights. One of those fundamental rights--access to 
justice--is barred by this resolution.
  I hope my colleagues will reject it, enable consumers to hold 
financial institutions accountable, and continue the work of the CFPB 
in making sure that consumers really receive a fair shake when they 
enter into a contract.
  I yield the floor to my colleague from Rhode Island.
  The PRESIDING OFFICER. The Senator from Rhode Island.
  Mr. WHITEHOUSE. Mr. President, I was just going to ask whether my 
colleague would yield for a question.
  My distinguished colleague from Connecticut is an extraordinarily 
experienced and able lawyer. He was U.S. attorney in Connecticut; for a 
long time, he was his State's attorney general, and I think he has 
argued more before the U.S. Supreme Court than perhaps anybody in 
modern history now in the Senate. One of his passions and one of the 
things he focused on in law enforcement was consumer protection, 
bringing to justice big entities that had done wrong to consumers.
  My question for him, if I may ask one, would be, are there 
circumstances--do you have experience of circumstances in which very 
big and powerful entities, corporations, or industries engaged in 
misconduct, even fraud, in which the individual harm to each of the 
consumers was not very big--a bogus $30 fee, a bogus $100 surcharge, 
something like that--but multiplied by thousands or tens of thousands 
of customers, it became an enormously lucrative fraud for the 
institution involved? Is that a situation that happens in real life, in 
your view, I ask my distinguished colleague?
  Mr. BLUMENTHAL. I thank my colleague from Rhode Island for that very 
pertinent question. Before I answer it, I thank him for his service as 
his State's attorney general and his State's U.S. attorney. He has as 
much experience as I do, and I know he appreciates that there are 
countless examples of exactly the kind of predicament he has so well 
described.
  The harm to each individual may be measured in tens of dollars, but 
the harm nationally to consumers may be measured in millions of 
dollars. If each of those consumers is forced to arbitrate, the result 
at best would be a few dollars to each of them, and most of them will 
abandon the claim because the services of an attorney or even the time 
they have to take to appear before a panel of arbitrators simply won't 
be worth it.
  The harm is not only to them, as my friend and colleague from Rhode 
Island has implied so well, it is to the consumers of the future 
because without public knowledge of the defective product or the 
predatory lending or the sexual harassment, that same harm will happen 
again and again.
  To take the topic of the day, sexual harassment, many of those 
employment clauses had the forced arbitration requirement that led to 
settlements and secrecy. For years and years, that harm was repeated to 
women who suffered because they were unaware of the harm about to 
befall them.
  It is a human tragedy, not just a financial tragedy, that often 
befalls consumers because of those fine-print arbitration clauses that 
consumers very often never even consider because at the time they sign 
the contract, they are not thinking about what can go wrong; they are 
buying a car or a product that seems just fine, or they are entering 
into a new job, or, as in the case of a veteran, they are signing up 
for a for-profit college, and they scarcely expect they will be, in 
effect, victims of these forced arbitration clauses.
  So the answer to my colleague's question, as he knows because he 
himself is such an expert in consumer protection, is a resounding yes. 
This rule is necessary to protect consumers against those kinds of 
harms, which, when added nationally, can be tremendously costly to our 
Nation as a whole.
  Mr. WHITEHOUSE. If I may ask if the Senator will yield for another 
question.
  Mr. BLUMENTHAL. I would be happy to yield.
  Mr. WHITEHOUSE. As I understand from the Senator's response to my 
last question, if you force the victims of low-dollar but multi-victim 
fraud to have arbitration as their only remedy, you are way less likely 
to get consumers asserting their rights, and ultimately you may have 
low-dollar, multi-consumer frauds that remain very remunerative for the 
crooked outfit conducting the massive fraud.
  I get the Senator's point that the incentives are such that it is 
very hard for an individual consumer to be willing to pursue that 
claim. If there is no way to aggregate themselves together into a class 
action, then there is really no way to pursue that claim.
  But my second question goes to a further point, which is that the 
power of a court in a matter like that includes the power not just to 
award damages but to provide other relief: to direct the company to 
quit the fraud, to give orders to people to clean up their act, to 
promise never to do it again, and so forth. I am not aware of any 
arbitration panel that has ever been given that authority or has ever 
used their limited power as arbiters or arbitrators to try to influence 
the behavior of the corporation.
  Is there not also a significant difference between an individual 
consumer being forced to go to an often stacked arbitration panel to 
pursue a claim that is so small, it is not worth their money, and the 
simple power to provide the real remedy the public seeks, as the 
Senator so wisely said, to protect the next consumer? It is not just 
about the people who got their pockets picked, who paid their 
unreasonable fee, who got defrauded; it is about stopping it so the 
future consumer is protected. I am not familiar with arbitration panels 
having that power.
  Mr. BLUMENTHAL. I appreciate my colleague's question. That is 
absolutely right. Arbitration panels do not have the power to issue 
injunctions--it is that simple. They do not have the power to grant 
injunctive relief even in the worst of circumstances. That is one of 
the reasons forced arbitration clauses exist: There is no danger of a 
court ordering increased disclosure or fairer terms going forward or an 
end to deceptive and misleading practices.
  I see we have been joined by another of our colleagues, Senator 
Cornyn of Texas, who served as attorney general before he began his 
distinguished career here, and he knows well that, as attorneys 
general, we often insisted on injunctive relief because we wanted to 
protect people going forward. That is a remedy that arbitration panels 
simply cannot award, and it is enormously consequential.
  Mr. WHITEHOUSE. And not infrequent in class action cases?

[[Page 16438]]


  Mr. BLUMENTHAL. That is exactly right. It is not infrequent in class 
action cases and not infrequent in individual cases where a plaintiff 
is willing to persist and takes it, as a matter of principle, that he 
will go to the nth degree legally and spend whatever it takes, if he or 
she has the resources, and some have done it as a matter of conviction 
and conscience to vindicate individual consumer rights, even though 
their ultimate payback in monetary terms may not have actually been 
worth it. But injunctive relief is often the key to fairness and 
justice.
  Mr. WHITEHOUSE. In conclusion, is it fair to say that the measure we 
are about to vote on will indisputably have the effect of shifting 
enormous power from consumers to corporations that engage in high-
volume but low-dollar fraud?
  Mr. BLUMENTHAL. Exactly right. I think that is the essence of what 
the effect will be today of this vote if it is to roll back this rule 
and, in effect, enhance the overweening power of companies and 
corporations that force consumers to engage in arbitration that they do 
not know will be the result and cannot change because it is a fixed 
term, even though it is in the fine print, and eventually rips them 
off.
  I thank my colleague for those extraordinarily insightful questions.
  I yield the floor.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. SCHUMER. Mr. President, I want to first thank my colleagues, 
particularly Sherrod Brown, our ranking member of the committee, 
Senators Whitehouse, Blumenthal, Franken, and so many others who have 
spoken so eloquently on this issue. I don't think it is a coincidence 
that many Members on our side have spoken and very few on the other 
side. Once again, it is one of those instances where the powerful will 
get more powerful. Everyone knows it, and people are not out there 
beating their breasts about this if they are trying to support it, and 
maybe there is a little bit of being ashamed.
  This is what has happened here. We finally have an agency to protect 
the consumers against large institutions, most of which are good 
institutions, but some of which typically take advantage of the average 
person. They do it in a whole variety of ways. We saw with Equifax the 
idea that they didn't have to protect people's information and were 
almost nonchalant about it. We saw it with Wells Fargo, where people 
came up with a scheme. We see it all the time. The average consumer 
doesn't have the lawyers, the time, and the ability to study what is 
happening. They don't understand the long contracts where they sign 
away their rights to go to court. They need a bank account. They need a 
car loan. They need something, and, yes, their only recourse in this 
case may be a class action suit, particularly if it is $20 or $30. You 
are not going to go to court individually, but if it is thousands of 
people, a trial lawyer will make some money, yes, to protect those 
people. How horrible that people might have the ability to come 
together and hire a lawyer.
  What is happening in the last 9 months is that--we have a lot of 
people who are disaffected. Many of the campaigns, including President 
Trump's campaign, understood that. But when President Trump campaigned, 
he campaigned as a populist against the powerful institutions, against 
the Washington lobbyists, and said: Let's do something for average 
people. But once he got into office, he embraced the hard right, whose 
goal in most cases is to just protect the powerful. They got this sort 
of drumbeat going on: Poor innocent people have too much power, and big 
banks and big corporations don't have enough. Let's go after unions, 
even though incomes are down and only 6 percent of private America is 
unionized. Let's go after them. They are too powerful. They make these 
big corporations squirm or pay a little more money to people or pay a 
benefit or pay some healthcare--how horrible. Let's go after the trial 
lawyers. I don't always agree with their tactics. I voted against them 
on occasion. But let's go after them, even though they are one of the 
few recourses that average people have. That is hardly as reprehensible 
as an Equifax or a Wells Fargo in doing what they do. But people on the 
other side somehow have this mythology because of the hard right and 
its machine and their think tanks and their media messaging--FOX News--
that somehow the powerful are getting a bad break in America and the 
average person has too much power.
  What is wrong?
  I will say this. It is going to lead to people being even more 
disillusioned, more angry, more sour, and we will move further away 
from what the American dream, ideal, and optimism are.
  Our colleagues on the other side, my dear friends--I like them, I 
really do--wittingly or unwittingly are part of this movement, and it 
is a shame. It is a shame.
  Community banks aren't beleaguered by these cases. They don't usually 
do this stuff. When I talked to community bankers who lobbied me on 
this, they basically said to me: No, we are with the whole banking 
association. The big banks want this.
  This is not little banks. These are the Wells Fargos and the 
Equifaxes. We shouldn't do it. We shouldn't do it.
  I worry about this country. I love this country. It has been so good 
to me, my family, and my people. I still believe to this day that it is 
what the Founding Fathers called it when they left Constitution Hall--
God's noble experiment.
  We are one nation under God, noble. We are a noble country. No one 
has had the ideals we have had for hundreds of years. We are an 
experiment. We keep evolving, changing, and adapting, as we should. But 
when I see what has gone on in the last 9 months--a combination of the 
President's appeal to lower instincts of people, to divisive instincts, 
and the hard right machine, which has too much power on the other side 
of the aisle--I worry. I worry. I worry about the country. I worry 
about our standards of decency and honor.
  Everyone heard Senator Flake speak today. It moved all of us. It is a 
shame he is leaving this body because he has been a voice and a beacon. 
I didn't agree with him on most issues, as is pretty obvious by our 
voting records, but he stood for the right thing. I say to my 
colleagues, somehow we are doing too many wrong things around here. We 
are trying to take away people's healthcare. We say we want better 
healthcare at lower costs. That is what the President says, but we put 
a bill on the floor that does the opposite. We know it. We are doing it 
on taxes. We say we want to help the middle class, and the tax bill 
dominantly helps the wealthy.
  Our colleagues on the other side of the aisle are afraid to say they 
are helping the wealthiest because they think that is the way to create 
jobs because they know that Americans don't believe it--nor should 
they.
  Most recently, the great Kansas experiment, the Koch brothers' own 
laboratory, totally flopped.
  They say unions have too much power, and yet incomes in the middle 
class have declined. There are abuses. There are abuses everywhere, but 
middle-class incomes decline, fewer people have bargaining power, more 
people are paid lower, and there are 7 million fewer good-paying jobs 
in America today than 15 years ago. In part, that is because we don't 
have unions and because the hard right has learned through legal 
tactics to destroy them, and now with government legal tactics on the 
absurd argument that the First Amendment says you don't have to join a 
union or pay dues to a union.
  This is just one of many issues where once again we are helping the 
powerful against the powerless. There is a political benefit, I 
understand. There is a fear if you go against these hard-right forces. 
I have heard it from my colleagues, but it is wrong for the country. I 
wish that maybe a bell would ring. There are lots of issues we don't 
agree on, but some of these issues don't have a basis in fact. That is 
why the floor is empty on the other side.
  I respect my dear friend. He is a good, good man, in the Flake mold. 
He has to be here all night and defend it. He doesn't have too many 
others backing him up, and I think I know why, because deep down they 
know it is wrong.

[[Page 16439]]

They can figure out that there is an abuse of trial lawyers, but they 
still know it is wrong. They still know it is wrong.
  To sum it up, a ``yes'' vote is handing a ``get out of jail free'' 
card or the equivalent to Wells Fargo and Equifax. It is that simple. A 
``yes'' vote is saying you believe that Americans who get taken 
advantage of don't have the right to seek recourse. A ``yes'' vote 
tells rapacious financial institutions that they can continue to hose 
consumers without any serious consequences or accountability, because 
we all know that average folks don't have the ability to go to court on 
their own to sue. We know that. Everyone knows that.
  If there are abuses, let's fix them, but don't totally denude people 
who don't have much power from the little power they might have through 
going to court. I hope that maybe there is somebody, because the vote 
is close. It took a long time to bring this resolution to the floor 
because there were some people who wanted to stand up, but they got 
ground down by this hard right machine that always wants its way.
  They are doing great. Corporate America is making more money than 
ever before. Financial institutions are healthier than ever before, but 
it is not good enough. More--we want more. The ``more'' is fine if it 
didn't come at the expense of average folks when somebody is abusive.
  The CRA is a meat-cleaver approach. Those who have issues with this 
should try to address them with a scalpel, not a bludgeon. I urge my 
colleagues one final time, those on the other side of the aisle, to 
vote no on this disapproval resolution on behalf of our constituents, 
who deserve to have more rights when standing up to the powerful when 
they are right, not less.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CORNYN. Mr. President, I know, for people watching this debate, 
it is easy to be confused. You hear the Democratic leader claiming that 
this is about the people who have no power, fighting against the most 
powerful institutions this country has to offer in their, somehow, 
trying to disadvantage them when, in fact, the opposite is true.
  In situations like this, it is frequently a good thing to follow the 
money. The reason the Consumer Financial Protection Bureau wants to ban 
arbitration as a means of alternative dispute resolution is that the 
trial lawyers, who benefit from the huge attorneys' fees awards, do not 
like the idea that they are, basically, being boxed out of that dispute 
resolution system; whereas, we know from the studies that have been 
done that consumers actually benefit from a cheaper, more efficient, 
more timely way of resolving disputes with financial institutions with 
which they may have disagreements.
  Back in the eighties, I still remember when I was a district judge in 
San Antonio, TX. Warren Burger, the Chief Justice of the U.S. Supreme 
Court, made the point that it was so expensive and so time-consuming 
for individual citizens to resolve their disputes in courts of law that 
we needed what we all called an alternative dispute resolution system 
that was able to resolve these disputes in a more timely, more cost-
effective sort of way, recognizing that very few people could afford to 
pay a lawyer an hourly fee or even a contingent fee for protracted 
civil litigation. Basically, ordinary consumers were frozen out of the 
dispute resolution process and were denied their day in court.
  That system actually worked pretty well, including arbitration, 
which, according to a Federal statute--the Federal Arbitration Act--is 
an impartial tribunal that, basically, decides these disputes in an 
efficient, cost-effective sort of way. In fact, we know from the 
studies that have been done that consumers actually benefit more from 
arbitration than they do as members of a class in class action 
lawsuits, where consumers typically get pennies on the dollar and the 
class counsel, the lawyers involved, are, perhaps, awarded millions of 
dollars.
  You have to ask the question: Whose benefit is that for? Is it really 
for the consumers or is it for the lawyers? I think the answer is 
pretty clear. It is not for the consumers. So, when I hear our friend 
across the aisle, the distinguished Democratic leader, cry crocodile 
tears for consumers, really, those are for the class action lawyers who 
are not part of the arbitration process.
  I think it is really important to make that point, which is that 
every single study that has been done shows that consumers actually 
benefit from arbitration compared to ordinary litigation. Not everybody 
can afford to be O.J. Simpson and hire the very best lawyers in America 
and try a case for weeks on end at a cost of millions of dollars. It 
just, simply, does not work that way for most people. So this is a very 
efficient, cost-effective, fair way to resolve those disputes in a way 
that consumers benefit.
  I do not understand, honestly, our colleagues across the aisle, 
except for their desire to demonize banks and large financial 
institutions, but it is not just large banks and financial 
institutions; it is community banks. We are talking about contractual 
arbitration provisions, which allow consumers to benefit from a means 
to resolve disputes with their local community banks, and they do not 
often involve huge amounts of money. Typically, lawyers are not going 
to be interested in a claim that do not involve much money, which is 
why most often, when one does get litigated, it is in the context of a 
class action, in which they aggregate all of these claims for thousands 
of people. Then, as we know, typically, it ends in some sort of 
settlement from which the consumers get coupons--frequently, no money--
and the class lawyers reap millions of dollars.
  Our colleagues across the aisle act as if they have the better part 
of this argument when, actually, they are arguing on behalf of one of 
the narrowest, wealthiest special interests in America today, and that 
is the trial lawyers. They act as if they are the friend of the 
consumer when they are actually arguing to the detriment of the 
consumer, because the consumer benefits from this less expensive, more 
efficient, more timely resolution of disputes with financial 
institutions, which is through contractual arbitration.
  There is the fact that the Consumer Financial Protection Bureau, 
which is sort of an anomaly in our system, is accountable to no one and 
not susceptible to oversight by Congress because of the way it was 
created. It is not even funded by appropriations of Congress as other 
government agencies are. It is really a rogue agency in so many ways--
not accountable to the American people, not subject to the oversight of 
Congress, not dependent upon Congress for the appropriations to, 
basically, do its work. So, when it overreaches like this and 
essentially outlaws this efficient, cost-effective, impartial way of 
resolving civil disputes, this is, perhaps, the greatest demonstration 
of the abuse that was wrought by the creation of the Consumer Financial 
Protection Bureau in the first place.
  When consumers benefit and trial lawyers do not, I don't know how you 
can justify the arguments on the other side, except to say that they 
are the party of the trial bar and that they really don't care about 
the consumers because they realize that consumers will end up with 
pennies on the dollar and that they would actually be better off in 
using the arbitration provisions in these contracts that are subject to 
the Federal Arbitration Act. Actually, this is a Federal law that 
mandates the procedures by which these arbitration panels are created. 
It is not as if the banks get to choose who sits on the arbitration 
panels. It is not as if they get to pick the judges in the cases. These 
are nonpartisan arbitrators who will decide the facts in law and let 
the chips fall where they may.

[[Page 16440]]

  I, for one, am not buying the crocodile tears of our friends across 
the aisle. They are not arguing in favor of the consumer; they are 
arguing on behalf of the trial bar, which gets rich on these cases.
  It is not just the fact that this handful of cases from which the 
lawyers get rich solves the problem, because there are many people who 
have legitimate disputes that need to be resolved from which the 
lawyers just simply turn away and say that that case will not get me 
enough money to justify my involvement. So guess what. You are out of 
luck. Good luck in finding a lawyer to litigate your case for $100 or 
$200. You are just not going to get a chance to do that. If a class 
action lawyer will not take the case, you are out of luck. I guess our 
friends across the aisle do not care.
  As for the fact that consumers could get recourse through arbitration 
in their using the Federal Arbitration Act--from an impartial panel 
that will decide what the facts are and grant awards without having to 
go to the expense and time associated with ordinary litigation--they, 
simply, do not really care about that.
  I would say, notwithstanding the dystopian view of our friends across 
the aisle that, somehow, this is a great conspiracy against the 
forgotten man and woman in our country, the opposite is actually true. 
What they are trying to do is advocate for the rich and the powerful--
the trial lawyers in America--and against the best interests of the 
consumer, who benefits from this contractual arbitration provision.
  I hope that our colleagues will not be persuaded by the arguments on 
the other side, because there is just, simply, no factual basis for 
them. I hope that in a little while here, when we vote on this 
congressional resolution of disapproval, we will have a solid vote in 
the disapproving of this ban on the use of alternative dispute 
resolution to resolve disputes, because a ``no'' vote, basically, is a 
vote on behalf of the rich and the powerful--the trial lawyers in 
America--who get enriched by the status quo in the absence of an 
alternative dispute resolution system.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Ms. WARREN. Thank you, Mr. President. Tonight we are on the verge of 
passing a Republican resolution to make it easier for financial 
institutions to cheat people. Earlier this year, the Consumer Financial 
Protection Board issued a rule that prohibits financial companies from 
forcing you to sign an arbitration clause that makes you forfeit your 
right to take a bank to court. So if this proposal passes, that rule 
will just disappear.
  Now, there are no real human beings who think it should be easier for 
financial institutions to steal money from you and get away with it. 
Bank lobbyists are the only people asking Congress to reverse this 
rule, but let's face it, the Wall Street Journal is pretty powerful 
around here. The question the American people should be asking right 
now is, Are they powerful enough to win tonight?
  The reason this vote is happening so late at night is because we were 
right on the verge of blocking it. The American people have watched as 
Wells Fargo cheated its customers and then used arbitration clauses to 
try to escape liability. They watched as Equifax negligently allowed 
hackers to steal personal financial information of more than half of 
all American adults and then used arbitration clauses to try to escape 
accountability. Politicians have been watching it too. While many of 
their eyes might be blinded by dollar signs, it may not be enough.
  There is bipartisan opposition in the Senate to turning financial 
institutions loose to swindle their own customers. Right now our best 
guess is that it is 50 to 50. That means that Vice President Mike Pence 
is on his way to the Senate to cast a tie-breaking vote. If we can't 
peel off one more Republican, Mike Pence will decide whether consumers 
can hold banks like Wells Fargo accountable when they cheat their 
customers.
  Now, everyone assumes Mike Pence will side with the big banks, and I 
have just one simple question: Why?
  President Trump, Mike Pence works for you. His job is to cast his 
vote the way you tell him to cast it. We spent more than a year 
listening to you, first as a candidate and then as a President, and you 
have gone on and on and on about how strong you are, how tough you are, 
and about how you are going to stand up to Wall Street.
  Well, this bill is a giant, wet kiss to Wall Street. Bank lobbyists 
are crawling all over this place begging Congress to vote and make it 
easier for them to cheat their customers. President Trump, are you 
really going to let Mike Pence cast a tie-breaking vote to hand big 
banks their biggest win in Congress since they crashed the economy 9 
years ago?
  You know, I followed a news story about how tough you are, Mr. 
President--standing up to Mitch McConnell, Paul Ryan, and the 
Republican Party. Well, this is a top priority for them, Mr. President. 
So do you work for Mitch McConnell now? Is that the deal? Are you going 
to roll over and hurt millions of people in this country because Mitch 
McConnell tells you to?
  I keep hearing that you and Steve Bannon are going to remake the 
Republican Party into a party that stands up to Wall Street. Steve 
Bannon works with the White supremacists, but, hey, he says he is going 
to help you drain the swamp, right?
  Well, where is the all-powerful Steve Bannon now? Where is he to tell 
Mike Pence and Donald Trump that they don't work for Mitch McConnell?
  Every organization--all the ones that represent actual human beings, 
not banks--want this rule to be saved, none more than the organizations 
that represent our veterans and our servicemembers. Do you know why 
that is, Mr. President? It is because they are sick and tired of being 
cheated by banks. They are sick and tired of politicians who say 
``thank you for your service'' and then turn around and vote to make it 
harder for them to build a future for themselves and their families.
  The Military Coalition, which represents more than 5.5 million 
veterans and servicemembers, supports the CFPB rule because ``our 
Nation's veterans should not be deprived of the constitutional rights 
and freedoms that they put their lives on the line to protect, 
including the right to have their claims heard in a trial.'' The 
Coalition says that ``[f]orced arbitration is an un-American system 
wherein servicemembers' claims against a corporation are funneled into 
a rigged, secretive system in which all the rules, including the choice 
of arbitrator, are picked by the corporation.'' They go on to warn that 
``the catastrophic consequences these [forced arbitration] clauses pose 
for our all-voluntary military fighting force's morale and our national 
security are vital reasons'' to preserve this rule.
  We have seen all the tweets, Mr. President. We have seen you go on 
and on about how disrespectful it is of our veterans and their families 
that some football players don't want to stand for the national anthem. 
Well, all three of my brothers served in the military, Mr. President. 
Do you know what is disrespectful of our veterans and their families? 
Passing laws that hurt our veterans and their families. Casting tie-
breaking votes for laws that are opposed by the American Legion, by the 
Military Coalition, by the Vietnam Veterans of America, by AMVETS, by 
the Association of the United States Navy, by the Military Order of the 
Purple Heart, by the Iraq and Afghanistan Veterans of America, by the 
Military Child Education Coalition, by the Military Veterans Coalition 
of Indiana, by the National Association of Black Veterans, by the 
National Guard Association of the United States, by the National 
Military Family Association, by the Noncommissioned Officers 
Association, by the Reserve Officers Association, by the Retired 
Enlisted Association, by the Veterans for Common Sense, by the Veterans 
Education Success, by Veterans Legal Institute, by VETJOBS and by Vets 
First.
  President Trump, this is up to you. Don't do this. Don't let Mike 
Pence cast the deciding vote to hand a huge

[[Page 16441]]

victory to Wall Street. If you do, you should be prepared for the 
consequences. Veterans know when a politician is all talk. They know 
the difference between a cheap pat on the back and a real punch to the 
gut. They will not forget what happens here today.
  And for Steve Bannon--if this really happens today and Mike Pence 
casts the deciding vote to make it easier for financial institutions to 
cheat people, do you want to remake the Republican Party in your image? 
Do you want to watch primary challenges against Republicans who roll 
over to Wall Street? Do you want to go after the weak and spineless, 
the DC-Wall Street swamp, the politicians who will not stand up to 
Mitch McConnell, and all the globalists who think cash matters more 
than people? If Mike Pence votes for this monstrosity, why don't you 
primary Donald Trump, and when you are finished with him, why don't you 
go after Mike Pence?
  Steve Bannon, put your fat wad of billionaire Mercer money where your 
mouth is or stop pretending that you are anything other than what you 
are.
  With the remainder of my time, I would like to read letters and op-
eds from veterans begging Congress not to repeal this rule.
  The first is from Col. Lee F. Lange, U.S. Marine, Retired, with 30 
years of service, now serving as Arizona chapter president of the 
Military Officers Association of America. He titles his letter, ``I 
Served to Protect Our Rights; Don't Let Equifax Take Them Away.''

       As a career Marine, I served to protect the rights of 
     Americans as guaranteed by the Constitution and its 
     amendments. Among them is the 7th Amendment right to trial by 
     jury in civil cases, a right dismissed by companies like 
     Equifax and now under siege in Congress.
       Forced arbitration ``ripoff clauses'' buried in the fine-
     print of bank accounts, auto loans and other contracts strip 
     servicemembers and veterans of their day in court when big 
     banks and other financial institutions violate the law. 
     Instead, people must face companies alone and cannot join 
     together in a rigged, secretive process where the banks and 
     lenders often choose the arbitrator.
       Men and women in uniform are surely among the 145.5 million 
     people impacted by the massive data breach of sensitive 
     personal information held by the credit reporting agency 
     Equifax--and among those whose access to the courts was 
     stripped in Equifax's fine print until the company had to 
     relent. Servicemembers from Sergeant Charles Beard to Army 
     soldier Prentice Martin-Bowen have also had their rights 
     limited by forced arbitration.
       Wells Fargo continues to use forced arbitration to deny 
     victims of the fake account scandal access to the justice 
     system. Arizona and Southern California were the epicenter of 
     the Wells Fargo scandal and Wells Fargo is Arizona's largest 
     bank. Some of the state's more than 500,000 veterans were 
     certainly caught up in its effects. Wells Fargo has been 
     caught but it is likely not the only financial institution 
     guilty of illegal practices.
       The Department of Defense has long pushed for 
     servicemembers full legal recourse against unscrupulous 
     lenders, and members now have some protection against forced 
     arbitration clauses through the Military Lending Act. But the 
     MLA protections don't apply to auto loans, to rights under 
     the Servicemembers Civil Relief Act, to bank account fraud 
     like the Wells Fargo scandal, or to veterans.
       The Consumer Financial Protection Bureau (CFPB) and its 
     Office of Servicemember Affairs have worked to protect those 
     who serve by issuing a rule restoring our 7th Amendment 
     rights and limiting the use of forced arbitration. The CFPB 
     rule enhances military consumer protections in the MLA, 
     restoring the right of servicemembers and veterans to seek 
     civil justice, including class action suits, for illegal 
     acts.
       For that reason, The Military Coalition, a national 
     consortium of uniformed services and veterans organizations 
     representing 5.5 million current and former servicemembers 
     and their families and survivors, urged Congress to let the 
     CFPB rule go into effect. The American Legion has done the 
     same. The general public--including 64 percent of Republicans 
     and 74 percent of Democrats--also supports the rule to 
     restore our day in court.
       But, despite this outpouring of support, the U.S. House of 
     Representatives has voted to block the rule from going into 
     effect. Wall Street lobbyists are pushing Congress to leave 
     forced arbitration as the only solution, severely limiting 
     the recourse of servicemembers and all Americans. For 
     example, only four arbitrations have been filed against Wells 
     Fargo in Arizona despite up to 178,972 or more fake accounts 
     in the state.

  That is 4 arbitrations against 178,972 or more fake accounts in the 
State.

       We can't allow forced arbitration to be used as a tool to 
     block accountability.
       The Senate, armed with lessons learned from the Equifax and 
     Wells Fargo scandals, can still reverse course. Our Senators 
     must put the interests of active-duty servicemembers, 
     veterans, and American consumers ahead of Wall Street 
     lobbyists and reject efforts to take away our day in court.

  That was from Col. Lee Lange, U.S. Marine Corps, Retired, chapter 
president of the Arizona Chapter of the Military Officers Association 
of America and president of the Southwest Veterans Chamber of Commerce.
  There is another one that I would like to read, and this is from the 
chairman of the Alaska Veterans Foundation. It is titled ``Forced 
arbitration and a right worth fighting for,'' by Ric Davidge.

       As a veteran, I am proud to have helped protect the 
     freedoms so zealously guarded for us by our Founders. Another 
     guarantor of those liberties is the right to our day in 
     court--one especially vital to today's servicemembers who are 
     so often taken advantage of by financial institutions.
       Today, the right to our day in court is endangered because 
     of actions under consideration by the United States Senate on 
     the issue of powerful banks and forced arbitration.
       James Madison, one of the principal drafters of the Bill of 
     Rights, wrote that ``trial by jury in civil cases is as 
     essential to secure the liberty of the people as any one of 
     the pre-existent rights of nature.'' The Founders saw this 
     right to be heard before a jury of our peers as so vital that 
     they enshrined it in the Seventh Amendment.
       This right is not only, in Winston Churchill's words, ``a 
     safeguard from arbitrary perversion of the law,'' but also a 
     means to ensure equal access to justice for the powerful and 
     the powerless alike, and for citizens to signal and set 
     acceptable standards of conduct in our society.
       Why bring this all up now? Because the U.S. Senate is 
     considering legislation to roll back a rule recently 
     finalized by the Consumer Financial Protection Bureau (CFPB) 
     to limit forced arbitration clauses buried deep in consumer 
     financial agreements. These forced arbitration agreements are 
     found in the fine print of financial agreements signed by 
     tens of millions of everyday Americans with the Wall Street 
     banks, covering everything from credit cards and checking 
     accounts to prepaid cards and payday loans. And they require 
     consumers to take disputes over bank wrongdoing not to courts 
     overseen by judges, but to arbitrators chosen by the 
     financial institutions--under their own rules.
       Arbitration hearings are held in private with no public 
     record, no meaningful rules, not even a requirement that 
     arbitrators enforce state and federal laws. And of course, no 
     jury.
       Perhaps most significant of all, Big Banks have leveraged 
     arbitration to block class action suits, where the ability of 
     consumers to band together helps balance the extraordinary 
     legal and financial resources at banks' disposal.
       The Wells Fargo scandals--yes, there's more than one--offer 
     a prime example of how financial institutions use forced 
     arbitration to rip off consumers.
       The bank, with 48 branches in Alaska, opened nearly 6,000 
     of its infamous fake accounts here on the Last Frontier.
       A California judge ordered the financial giant to repay 
     customers more than $200 million for manipulating accounts to 
     generate overdraft fees--another activity repeated here.
       Recently, nearly a quarter million Wells Fargo car loan 
     customers were dinged for nonpayment of insurance policies 
     illegally taken out for them--and almost 25,000 had vehicles 
     repossessed.
       Most infuriating, Wells Fargo has been fined millions for 
     foreclosing on servicemembers or repossessing their cars in 
     violation of the Servicemembers Civil Relief Act.
       In every case, Wells has used arbitration to shield itself 
     from accountability. Since 2009, only 215 consumers 
     nationwide have filed arbitrations against Wells Fargo--but 
     not one in Alaska. The reason: arbitration is often too 
     expensive for a single consumer with a small claim.
       That's why the CFPB rule is so important--and why the Big 
     Banks' Washington lobbyists are working overtime to have it 
     overturned. The regulation will ensure all Alaskans retain 
     the right to their day in court as part of class actions--and 
     uphold the Servicemembers Civil Relief Act to protect the 
     legal rights of the men and women fighting for this country.
       As Congress considers whether to preserve this critical 
     protection for everyday consumers, and especially for our 
     servicemembers, our Alaska Republican Senators, Lisa 
     Murkowski and Dan Sullivan, need to remember that equal 
     access to justice is not a Republican or a Democratic idea. 
     It is an American right, as old as our Republic itself, and 
     it's worth fighting for.
       Ric Davidge serves as chairman of the Alaska Veterans 
     Foundation.

  From Robert Mitchell, a Marine Corps veteran: ``Forced arbitration is 
un-American.'' This is from the Arkansas Democrat-Gazette.


[[Page 16442]]

       I am a proud Marine Corps veteran. Abroad, I joined with my 
     fellow Marines in united pursuit of justice and rights. At 
     home, I fight for them and other U.S. military members to be 
     treated fairly and with dignity in their financial affairs. 
     I'm disappointed by the actions of my U.S. Sen. Tom Cotton, 
     who is seeking to roll back a recent rule that restores 
     servicemembers' and other Americans' legal rights in the 
     financial marketplace.
       So often, military members are unfairly targeted by 
     aggressive lenders, abusive debt collectors, reckless credit-
     reporting bureaus, and discriminating employers. So I devote 
     my time to help them enforce their rights under federal and 
     state laws that grant them remedies and other ways to hold 
     bad actors accountable when they flout these laws.

  He goes on to talk about what happens in the fine print in these 
contracts and how it is that veterans and Active-Duty servicemembers 
are repeatedly cheated.
  His closing remarks are as follows:

       Unfortunately, although the rule restores the rights of 
     active-duty servicemembers and American civilians, it has 
     become controversial in Washington because the financial-
     services industry opposes it. For several years now, 
     financial institutions have been able to use their strict 
     terms to wipe away individuals' rights and essentially ignore 
     legal complaints.
       But Senator Cotton and our representatives in Congress must 
     take the opportunity to look beyond the lobbyists and toward 
     the experiences of our military members and the U.S. 
     Constitution. They should support, not abandon, a rule that 
     simply restores our traditions.

  I will just reference a letter from The Military Coalition, a 
consortium of uniform services and veterans organizations representing 
more than 5\1/2\ million current and former servicemembers and their 
families and survivors who also wrote in strong support of protecting 
the Consumer Financial Protection Bureau arbitration rule. They 
conclude:

       Our nation's veterans should not be deprived of the 
     Constitutional rights and freedoms that they put their lives 
     on the line to protect, including the right to have their 
     claims heard in a trial by a jury when their rights are 
     violated. The catastrophic consequences these clauses pose 
     for our all-voluntary military fighting force's morale and 
     our national security are vital reasons for this rule to take 
     effect immediately.

  We also have a resolution passed by the Ninety-Ninth National 
Convention of the American Legion asking Congress not to roll back the 
arbitration rule put forward by the CFPB, and we have a letter from 
more than 30 veterans associations begging this Congress to please not 
get rid of the forced arbitration clause that has been put forward by 
the Consumer Financial Protection Bureau.
  Mr. President, I ask unanimous consent to have these letters and 
resolution printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                       The Military Coalition,

                                    Alexandria, VA, July 25, 2017.
     Hon. Paul Ryan,
     Speaker of the House,
     Washington, DC.
     Hon. Nancy Pelosi,
     House Minority Leader,
     Washington, DC.
     Hon. Mitch McConnell,
     Senate Majority Leader,
     Washington, DC.
     Hon. Chuck Schumer,
     Senate Minority Leader,
     Washington, DC.
       Dear Rep. Ryan, Rep. Pelosi, Sen. McConnell, and Sen. 
     Schumer: The Military Coalition (TMC), a consortium of 
     uniformed services and veterans organizations representing 
     more than 5.5 million current and former servicemembers and 
     their families and survivors writes today in strong support 
     of the Consumer Financial Protection Bureau's (CFPB) final 
     rule on Arbitration Agreements (Docket No. CFPB-2016-0020; 
     RIN 3170-AA51). The final rule addresses the widespread harm 
     of forced arbitration by preserving the ability of service 
     members and other consumers to band together to seek relief 
     through the civil justice system when financial institutions 
     have broken the law. We applaud the CFPB for moving forward 
     on this rule that recognizes the detrimental effects of 
     forced arbitration and class action waivers on our brave men 
     and women in uniform.
       Forced arbitration is an un-American system wherein service 
     members' claims against a corporation are funneled into a 
     rigged, secretive system in which all the rules, including 
     the choice of the arbitrator, are picked by the corporation. 
     Found in almost every financial services contract, forced 
     arbitration clauses systematically include a provision 
     banning the rights of consumers to ban together to hold a 
     corporation accountable. Given the exponential and expansive 
     use of these clauses by financial institutions in contracts 
     with service members, prohibiting the practice of forcing 
     service members to surrender fundamental Constitutional and 
     statutory rights through the use of pre-dispute forced 
     arbitration clauses is now more critical than ever.
       Our service members protect our nation against both foreign 
     and domestic threats. The sacrifices and logistical 
     undertakings they and their families make in order to serve 
     are compelling reasons alone to ensure they are not only 
     shielded from predatory financial practices and unscrupulous 
     lenders, but are also able to enforce their congressionally 
     mandated rights through our civil justice system if and when 
     violations arise.
       However, class action waivers work against these rights. 
     They are particularly abusive when enforced against service 
     members, who may not be in a position to individually 
     challenge a financial institution's illegal or unfair 
     practices because of limited resources or frequent 
     relocations or deployment. Furthermore, for those service 
     members on active duty and serving overseas, it is critical 
     to retain the ability to get justice without having to 
     interrupt their service and distract their attention from the 
     mission at hand. Since these types of service members cannot 
     participate full time in pursuing an individual claim, being 
     able to enforce their rights through the class action 
     mechanism is essential. Thus service members should receive 
     the benefits of participating in a class action despite their 
     inability to shoulder the burden of bringing a claim alone.
       Our nation's veterans should not be deprived of the 
     Constitutional rights and freedoms that they put their lives 
     on the line to protect, including the right to have their 
     claims heard in a trial by a jury when their rights are 
     violated. The catastrophic consequences these clauses pose 
     for our all-voluntary military fighting force's morale and 
     our national security are vital reasons for this rule to take 
     effect immediately.
           Sincerely,
     The Military Coalition.
                                  ____


Ninety-Ninth National Convention of the American Legion--Reno, Nevada, 
                        August 22, 23, 24, 2017

     Resolution No. 83: Protect Veteran and Servicemember Rights 
         to Fair Consumer Arbitration
     Origin: Convention Committee on Veterans Employment & 
         Education
     Submitted by: Convention Committee on Veterans Employment & 
         Education
       Whereas, The American Legion is a national organization of 
     veterans who have dedicated themselves to the service of the 
     community, state and nation; and
       Whereas, The U.S. Consumer Financial Protection Bureau's 
     (CFPB) rule on Arbitration Agreements (Docket No. CFPB-2016-
     0020; RIN 3170-AA51) addresses the widespread harm of forced 
     arbitration by restoring the ability of servicemembers, 
     veterans and other consumers to join together and seek relief 
     in class action lawsuits when financial institutions break 
     the law; and
       Whereas, Congress enacted the Servicemembers Civil Relief 
     Act (SCRA), 50 U.S.C. app. 501 et seq., to strengthen and 
     expedite national defense by granting servicemembers certain 
     protections in civil actions against default judgments, 
     foreclosures and repossessions, enforceable in a court of 
     law; and
       Whereas, In some cases, financial institutions violate SCRA 
     or other statutory or constitutional protections in their 
     interactions with servicemembers; and
       Whereas, Many financial institutions include pre-dispute 
     mandatory arbitration clauses in contracts of adhesion that 
     bar servicemembers and others from bringing a legal action in 
     court or banding together in a class action lawsuit to seek 
     relief under federal or state law; and
       Whereas, Class action waivers are particularly burdensome 
     to servicemembers, who may not be able to challenge a 
     financial institution's illegal or unfair practices 
     individually due to limited resources, deployment or frequent 
     relocations; and
       Whereas, The Department of Defense concluded in 2006 that 
     ``Servicemembers should maintain full legal recourse against 
     unscrupulous lenders. Loan contracts to servicemembers should 
     not include mandatory arbitration clauses or onerous notice 
     provisions, and should not require the servicemember to waive 
     his or her right of recourse, such as the right to 
     participate in a plaintiff class''; and
       Whereas, This is extremely unfair to bar servicemembers, 
     veterans and other consumers from joining together to enforce 
     statutory and constitutional protections in court, placing an 
     extreme hardship on the individual: Now, therefore, be it
       Resolved, By The American Legion in National Convention 
     assembled in Reno, Nevada, August 22, 23, 24, 2017, That The 
     American Legion oppose legislation to repeal the Consumer 
     Financial Protection Bureau's rule on arbitration agreements 
     and bar servicemembers, veterans and other consumers from 
     joining together in court against unscrupulous financial 
     institutions.

[[Page 16443]]

     
                                  ____
                                                      May 3, 2017.
     Sen. Mike Crapo,
     Chair, Committee on Banking, Housing, and Urban Affairs, U.S. 
         Senate.

     Rep. Jeb Hensarling,
     Chair, Committee on Financial Services,
     House of Representatives.

     Sen. Sherrod Brown,
     Ranking Member, Committee on Banking, Housing, and Urban 
         Affairs, U.S. Senate.
     Rep. Maxine Waters,
     Ranking Member, Committee on Financial Services, House of 
         Representatives.
       Dear Chairmen Crapo and Hensarling & Ranking Members Brown 
     and Waters: We, the undersigned representatives of 
     organizations who advocate for our nation's military 
     servicemembers, veterans, survivors, and military families, 
     write to urge you respectfully to ensure that important laws 
     and regulations that protect against financial deception and 
     abuse are not watered down or eliminated. We hope that 
     bipartisan agreement is possible in order to protect 
     America's military heroes and their families by resisting 
     proposals that would curtail the effectiveness of the 
     Consumer Financial Protection Bureau (CFPB).
       CFPB's Office of Servicemember Affairs--launched by Mrs. 
     Holly Petraeus--has produced tangible results for military 
     families across the country. Military leaders nationwide have 
     lauded the work of the consumer agency and its dedicated 
     military unit. For these reasons, we urge you to resist any 
     proposals that would limit the CFPB's ability to work on 
     behalf of servicemembers through changes to its authorities, 
     structure, or independent funding.
       The CFPB's work to protect, assist, and educate military 
     families in the financial sphere is paying dividends for our 
     nation's military personnel readiness. We urge you to 
     continue to support the work of the Consumer Financial 
     Protection Bureau and its dedicated military office.
       The enclosure to this letter summarizes the many ways that 
     the CFPB supports the Defense Department's key asset, its men 
     and women in uniform and their families.
           Sincerely,
       AMVETS, American Legion Post 122, Association of the United 
     States Navy, Blue Star Families, Coast Guard Chief Petty 
     Officers Association, Code of Support Foundation, Fleet 
     Reserve Association, Iraq and Afghanistan Veterans of 
     America, Ivy League Veterans Council, Military Child 
     Education Coalition, Military Order of the Purple Heart, The 
     Military / Veterans Coalition of Indiana, National 
     Association of Black Veterans, National Guard Association of 
     the United States.
       National Military Family Association, Non-Commissioned 
     Officers Association, Public Law Center, Operation Veterans 
     Re-Entry, Reserve Officers Association, Swords to Plowshares, 
     The Retired Enlisted Association, Tragedy Assistance Program 
     for Survivors, Veterans for Common Sense, Veterans Education 
     Success, Veterans Legal Clinic of the University of San 
     Diego, Veterans Legal Institute, Veterans Student Loan Relief 
     Fund, VetJobs, VetsFirst, a program of United Spinal 
     Association, Vietnam Veterans of America.
                                  ____


               The Value of the CFPB to National Security


                  Military Family Financial Readiness

       At the direction of Congress, the Department of Defense 
     (DOD) produced a report outlining its concerns with harmful 
     financial practices. The report noted that ``predatory 
     lending undermines military readiness, harms the morale of 
     troops and their families, and adds to the cost of fielding 
     an all volunteer fighting force.''
       According to Department of Defense analysis of involuntary 
     separations that were due to legal or standard-of-conduct 
     issues--an average of 19,893 per year--the Department 
     estimates that approximately half are attributable to a loss 
     of security clearance, and, of these, 80 percent are due to 
     financial distress. The Department estimates that each of 
     these separations costs taxpayers over $57,000. Addressing 
     financial misconduct by bad actors that target military 
     families can both contribute to overall military readiness 
     and reduce the costs to taxpayers of involuntary separations.
       Senior enlisted leadership vigorously praised the work of 
     the Consumer Financial Protection Bureau and its Office of 
     Servicemember Affairs in a February 14, 2017, hearing by the 
     Senate Armed Services Committee, Military Personnel 
     Subcommittee. For example, Sergeant Major of the Army Daniel 
     A. Dailey stated, ``I see value in that organization and I 
     know they have done great things for our servicemembers.''


                       `Dollar Signs in Uniform'

       In an op-ed in the The New York Times, Mrs. Petraeus 
     describes how certain industry actors build their business 
     models on revenue from servicemembers, veterans, and their 
     families. While we welcome and celebrate businesses that 
     serve our community in an honorable, trustworthy manner, some 
     bad actors see us as nothing more than ``dollar signs in 
     uniform.''
       In the last decade, we have seen financial companies engage 
     in foreclosure activity, auto lending, and payday lending 
     that violated laws and regulations protecting consumers and 
     servicemembers. There is a clear need for the CFPB to provide 
     both prevention and protection against harmful financial 
     practices.


                        The CFPB's Strong Record

       The CFPB engages in a number of activities that benefit 
     military families including monitoring of complaints, 
     enforcement, outreach and education, and consumer protection 
     initiatives.
       Consumer Complaints. Military families have submitted 
     70,000 complaints; the agency's military unit closely 
     analyzes these complaints to better understand the challenges 
     that servicemembers face and how to address them. These 
     complaints often lead to significant monetary relief for 
     families who have been harmed by wrongful practices.
       Education and Outreach. The CFPB has brought new leadership 
     and emphasis on service member issues by actively reaching 
     out to listen to and engage with servicemembers and has 
     developed a variety of resources.
       Military installation visits: Nineteen visits in 2015 where 
     the OSA held Town halls and listened to servicemembers 
     directly.
       Briefings, Outreach, and Community Collaborations: Over 60 
     events in 2015 delivered consumer resources directly to 
     servicemembers.
       Veterans Outreach: Sixteen events were held in 2015 with 
     the aim of collaborating with other veteran support 
     organizations promoting consumer protection.
       Digital Engagement: Financial resources delivered through 
     social media, and social media town halls with federal and 
     non-profit partners, as well as offering online training for 
     military financial educators.
       On-Demand Virtual Forums: The forums provide servicemembers 
     and military financial educators with virtual training on 
     topics ranging from debt collection to the CFPB's complaint 
     process.
       Direct-to-Consumer Education Materials: The materials 
     provide information on common issues facing the clients of 
     the military legal assistance community, including protecting 
     your credit while you are away from home, knowing your rights 
     when a debt collector calls, and minimizing student loan 
     payments.
       Between October 1, 2011 and December 31, 2016, OSA 
     delivered consumer financial educational information and 
     materials to more than 26,000 servicemembers through live 
     events. This included interacting with active-duty 
     servicemembers and National Guard personnel through 
     leadership roundtables and town-hall-style listening sessions 
     at 145 military installations/units.
       Supervision and Enforcement. The CFPB has placed a high 
     priority on holding financial companies that may be harming 
     military families accountable.
       Before the CFPB was created, no federal agency routinely 
     examined or supervised non-bank businesses offering consumer 
     financial products. The Federal Trade Commission had 
     enforcement authority under the Federal Trade Commission Act 
     against unfair and deceptive practices and to enforce federal 
     credit laws with non-bank financial services companies, but 
     did not have supervision authority. The CFPB's new 
     supervision authority coupled with its authority to enforce 
     the Military Lending Act and its focus on listening to 
     servicemembers has allowed for enforcement actions that would 
     not have happened without the CFPB.
       For example, the CFPB cited Cash America for violating the 
     Military Lending Act after routine examination exposed 
     compliance problems. The agency took action against USA 
     Discounters and other retail creditors abusing military 
     allotment systems. Other enforcement actions that also 
     impacted servicemembers include:
       Rome Finance where, in conjunction with 13 state attorneys 
     general, CFPB provided $92 million in debt relief for 17,000 
     U.S. servicemembers and other consumers;
       Suits against closed proprietary colleges ITT and 
     Corinthian Colleges, Inc. for predatory lending with debt 
     relief for Corinthian students of $480 million ultimately 
     secured.
       Common-Sense Rules of the Road. The consumer agency has 
     also pursued consumer protection initiatives that will 
     strongly benefit military families.
       Debt Collection: Over 46% of complaints received from 
     servicemembers in 2015 concerned debt collection. And 
     according to a 2015 report, servicemembers were nearly twice 
     as likely to submit debt collection complaints as the general 
     population who also submitted complaints. The CFPB has 
     outlined proposals to increase consumer protections from debt 
     collectors to address the industry's most abusive practices.
       Forced Arbitration: The CFPB's proposed rule to rein in the 
     widespread harm of forced arbitration by preserving the 
     ability of servicemembers and other consumers to join 
     together in court when financial institutions break the law. 
     Compliance with the Servicemembers Civil Relief Act has been 
     a particular problem. Class action bans, which take away the 
     right to collective action, are particularly abusive, as they 
     prevent courts from ordering widespread relief when thousands 
     or millions of servicemembers are harmed. Class action bans 
     also prevent

[[Page 16444]]

     servicemembers from banding together when they are not in a 
     position to individually challenge a financial institution's 
     illegal or unfair practices due to limited resources or 
     frequent relocations or deployment. The Military Coalition, 
     representing 5.5 million servicemembers and their families, 
     recently sent a letter to the CFPB in support of this 
     proposal.


                               Conclusion

       As noted by the Military Officers Association of America, 
     in a recent letter to the U.S. Senate Committee on Banking, 
     Housing, and Urban Affairs, it is ``vitally important to the 
     military community and readiness that the work of the Office 
     of Servicemember Affairs continues.''

  Ms. WARREN. It really comes down to this: We have heard from veterans 
groups, from individual veterans, Active-Duty military, and from banks, 
and the banks are the ones saying: Roll back this rule, and the 
veterans and Active-Duty military are asking us not to.
  The decision hangs in the balance tonight, and I urge my colleagues: 
Just once, don't stand up with the big banks; stand up with the 
veterans.
  I urge the President of the United States: Show us what you are made 
of. Stand up with America's veterans. Stand up to Wall Street; don't 
just roll over for Wall Street. Be there for the people who count on 
you. Be there for our veterans and Active-Duty military.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, just for everybody's information, I am 
going to speak for just 2 or 3 minutes and then yield back our time, 
and then Senator Brown will do the same, and then we will proceed to a 
vote.
  I just want to make clear what we are talking about here. You have 
heard a lot of talk tonight about how this is trying to stop the forced 
arbitration. You have heard that word a lot. Let's make it really clear 
what the debate is about.
  Using the CFPB's own study--I am quoting the CFPB now--``the clear 
majority of the arbitration clauses within our review specifically 
recognize--and allow--access to small claims courts as an alternative 
to arbitration.'' So this notion that we are here fighting tonight 
about whether people who have small claims don't have any outlet except 
arbitration is simply false. That is a false orchestration of what the 
argument is.
  What is the argument? Well, why don't we look at the rule and see 
what the rule says again? And now I am quoting specifically from the 
CFPB rule. It prohibits a company from relying ``in any way''--it 
doesn't say forced arbitration--from relying ``in any way on a pre-
dispute arbitration agreement . . . with respect to any aspect of a 
class action.''
  It goes on, and the rule actually states specific language that 
people have to put in their contracts. What is that language? This rule 
requires people to ``agree that neither we nor anyone else will rely on 
this agreement to stop you from being part of a class action case in 
court.''
  So the issue here, Mr. President, is not forced arbitration. Even 
existing arbitration clauses allow alternatives. The issue here is the 
CFPB's effort to force dispute resolution into class action litigation.
  Some have talked here tonight about how we are trying to stop access 
to the courtroom. Well, first of all, I think that argument is belied 
again by the CFPB's own study that explicitly states that no class 
actions filed during the time period that the CFPB studied even went to 
trial. So this argument falls on its own face.
  Meanwhile, let's look again at what the difference between 
arbitration and forced class actions does. In arbitration, a decision 
on the merits was reached in 32 percent of the disputes filed, where, 
as I indicated, zero of the class action cases even went to trial. In 
addition, according to the CFPB's own study, most arbitration 
agreements and consumer financial contracts contain a small claims 
court carve-out.
  Given the methodological flaws in the CFPB's study, it is difficult 
to make apples-to-apples comparisons about class action versus 
arbitration, but the Wall Street Journal's editorial board made this 
observation:

       Of the 562 class actions the CFPB studied, none went to 
     trial. Most were dismissed by a judge, withdrawn by the 
     plaintiffs or settled out of class.

  I will conclude with just the numbers that we have already talked 
about many times tonight.
  What is the comparison between arbitration and class action 
litigation? That is the issue tonight. What is the comparison? The 
average recovery for the consumer in a class action case is $32. The 
average recovery in an arbitration is $5,389. It takes 2 years for the 
class action to take place; 5 months for the arbitration. In 12 percent 
of the class action matters did they even reach settlements. In 60 
percent, they reached them in arbitration. Attorneys' fees: $424 
million in class action cases; virtually no attorneys' fees in 
arbitration cases.
  The point here is exactly this: The debate tonight is not, as many 
would have you believe, over whether we are forcing arbitration. Even 
the arbitration clause in the current system creates options for 
consumers to go into small claims courts. The vote here tonight is 
whether to force dispute resolution into class action litigation, and 
that is what we need to decide with tonight's vote.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. BROWN. Mr. President, the Vice President of the United States is 
here. Looks like Equifax and Wall Street and Wells Fargo will win 
again. The Vice President only shows up in this body when the rich and 
the powerful need him. It is pretty clear tonight that Wall Street 
needs him. This vote will make the rich richer. It will make the 
powerful more powerful.
  Forced arbitration hurts the 3.5 million people who were defrauded by 
Wells Fargo. Forced arbitration hurts the 145 million Americans who 
were wronged by Equifax, 5 million in Ohio alone. It hurts employees 
who have been hurt by their employers. It hurts students who have been 
cheated by for-profit colleges. It hurts family members in nursing 
homes. It hurts the millions of Americans with student loan debt and 
credit cards.
  I will close with this. I want every voting Member of the Senate to 
look into the eyes of the American Legion veterans who say a vote to 
overturn the CFPB arbitration rule is a vote against our military and 
against our veterans. Vote no.
  I yield back the time on our side.
  Mr. CRAPO. Mr. President, I also yield back our time.
  The PRESIDING OFFICER. All time is yielded back.
  The joint resolution was ordered to a third reading and was read the 
third time.
  The PRESIDING OFFICER. The joint resolution having been read the 
third time, the question is, Shall the joint resolution pass?
  Mr. BURR. I ask for the yeas and nays.
  The PRESIDING OFFICER (Mr. Boozman). Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  The yeas and nays resulted--yeas 50, nays 50, as follows:

                      [Rollcall Vote No. 249 Leg.]

                                YEAS--50

     Alexander
     Barrasso
     Blunt
     Boozman
     Burr
     Capito
     Cassidy
     Cochran
     Collins
     Corker
     Cornyn
     Cotton
     Crapo
     Cruz
     Daines
     Enzi
     Ernst
     Fischer
     Flake
     Gardner
     Grassley
     Hatch
     Heller
     Hoeven
     Inhofe
     Isakson
     Johnson
     Lankford
     Lee
     McCain
     McConnell
     Moran
     Murkowski
     Paul
     Perdue
     Portman
     Risch
     Roberts
     Rounds
     Rubio
     Sasse
     Scott
     Shelby
     Strange
     Sullivan
     Thune
     Tillis
     Toomey
     Wicker
     Young

                                NAYS--50

     Baldwin
     Bennet
     Blumenthal
     Booker
     Brown
     Cantwell
     Cardin
     Carper
     Casey
     Coons
     Cortez Masto
     Donnelly
     Duckworth
     Durbin
     Feinstein
     Franken
     Gillibrand
     Graham
     Harris
     Hassan
     Heinrich
     Heitkamp
     Hirono
     Kaine
     Kennedy
     King
     Klobuchar
     Leahy
     Manchin
     Markey

[[Page 16445]]


     McCaskill
     Menendez
     Merkley
     Murphy
     Murray
     Nelson
     Peters
     Reed
     Sanders
     Schatz
     Schumer
     Shaheen
     Stabenow
     Tester
     Udall
     Van Hollen
     Warner
     Warren
     Whitehouse
     Wyden
  The VICE PRESIDENT. On this vote, the yeas are 50, the nays are 50. 
The Senate being equally divided, the Vice President votes in the 
affirmative, and the joint resolution, H.J. Res. 111, is passed.
  The PRESIDING OFFICER (Mr. Boozman). The majority leader.

                          ____________________