Sen. Mike Crapo, R-Idaho, chairman of the Banking, Housing and Urban Affairs Committee, said that that the average payout for consumers in class-action lawsuits against financial companies was just $32, while lawyers stood to make millions.
The creator of the rule, CFPB Director Richard Cordray, called President Trump’s decision “a giant setback for every consumer in this country. As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers."
The reversal allows banks and credit card companies to continue to tuck away mandatory arbitration clauses in contracts and terms of service, forcing consumers to relinquish their right to sue in court, regardless of wrongdoing. The majority of these mandatory arbitration clauses have been upheld by the courts that have reviewed them.
“The result will be unchecked wrongdoing, with bad actors pickpocketing everyday consumers without accountability,” Best said. “When consumers can join together they put powerful interests on notice that they will be held accountable for their actions. When consumers are forced to stand alone, the powerful are able to do them wrong without accountability.”