Mike Pence casts deciding vote in bill that strips people of their rights against big banks

Wall Street gets another major victory

Published October 25, 2017 2:34PM (EDT)

Mike Pence   (Getty/Bill Ingalls)
Mike Pence (Getty/Bill Ingalls)

With the Senate gridlocked Tuesday night, Vice President Mike Pence cast the tie-breaking vote to kill Americans' right to file class-action lawsuits against financial institutions that commit abuses. The move handed Wall Street another major victory.

The vote "means that big financial companies can lock the courthouse doors and prevent consumers who’ve been mistreated from joining together to seek the relief they deserve under the law," according to George Slover, senior policy counsel for Consumers Union.

Both Democrats and consumer advocated praised the rule, which was unveiled in July by the Consumer Financial Protection Bureau and in the works for roughly five years, the Los Angeles Times reported.

The rule would have gone into effect in March, and "would not have banned clauses in checking account, credit card and other banking agreements that say disputes between companies and customers must be dealt with privately or in small claims court," the L.A. Times reported. "Instead, there would have been a ban on provisions that block consumers from banding together to bring class-action cases. The CFPB argued that such cases help hold banks accountable."

President Donald Trump praised Pence and Congress for his vote and said the rule would have given consumers "fewer options for quickly and efficiently resolving financial disputes," the L.A. Times reported.

Congressional Republicans argued that the rule would result in a barrage of class-action lawsuits, of which the costs would ultimately fall into the hands of consumers.

"The entire purpose of this rule is to promote class-action litigation and stop arbitration resolution when there is a dispute," Sen. Mike Crapo, R-Idaho, said.

However, CFPB Director Richard Cordray said the move was "a giant setback for every consumer in this country."

"It robs consumers of their most effective legal tool against corporate wrongdoing," he added. "As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers."

By Charlie May

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Banking Reform Consumer Rights Mike Pence Republicans Senate Wall Street