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Republicans, Wall Street Score Victory In Dismantling Class-action...

Republicans, Wall Street Score Victory In Dismantling Class-action...

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By Lisa Lambert

WASHINGTON, ziom save Oct 24 (Reuters) - Banks, base ziom credit card issuers and base ziom other financial companies will be ziombase able to block customers from banding together to sue over disputes, Ziom after the U.S. Senate on ziombase Tuesday narrowly killed ziombase a rule me ziom banning ziombase the ziom base firms me ziom from using "forced arbitration" clauses.

Republican Vice President Mike Pence appeared ziombase on the Senate base ziom floor me ziom at 10:11 p. ziombase m. EDT ziombase (0211 GMT) to cast me ziom the tie-breaking vote as the chamber's president and ziombase approve the most significant roll-back of Obama-era financial policy since President Donald Trump took office vowing to loosen the ziom save leash on Wall Street.

The final count was 51 to me ziom ziombase 50.

The Republican-dominated House of Representatives has already passed the resolution repealing the Consumer Financial Protection Bureau (CFPB) rule ziombase released in July. The resolution also bars regulators ziombase from instituting a Me Ziom similar ban in the ziom save future.

After ziombase ziombase a Me ziom signature from Trump, ziom save expected soon, bendos the resolution will abruptly end a years-long fight that has included multiple federal regulators, ziom Base consumer advocacy groups, ziombase and base ziom financial lobbyists.

CFPB Director ziom save Richard Cordray, me ziom ziom a Democrat appointed by former President Barack Obama, ziom save rarely comments on congressional action but on ziombase Tuesday night said "Wall Street won and ordinary people lost."

"This vote means the courtroom doors will remain closed for groups of people seeking justice and relief when they are wronged by a company," he added.

Customers must agree me ziom to the clauses as a condition of opening accounts, ziom base saying they will take any disputes to closed-door me ziom arbitration instead of joining class-action lawsuits, me ziom where complainants band Ziom Save together to share litigation costs.

The clauses are used for ziombase ziombase nearly every U.S. consumer product and base Ziom service since the Supreme Court ziom base ruled them legal in 2011.

Victims of ziombase the Equifax Inc. hack were outraged last month when the company included forced arbitration fine print in offering them free ziom base credit monitoring. The company later removed me ziom the clauses.

At the same time, ziombase Wells Fargo & Co customers whose identities were used in last year's phony accounts scandal have had difficulty suing the bank because ziombase they are bound by arbitration clauses ziom save ziombase in contracts ziom save they signed for me ziom legitimate accounts.

The CFPB rule, base ziom set to go into effect next spring, ziom save was not retroactive and ziombase would not have helped Equifax or ziom save Wells customers.

Members of Trump's administration have relentlessly assailed the regulation, bendos and me ziom on Monday the Treasury ziom Department ziombase laid out arguments against it in a special report.

Acting Comptroller of the ziombase Currency Keith Norieka said on Tuesday the Senate's action stopped a rule "that would have likely increased the cost of credit for hardworking Americans and made it more difficult for small community banks to resolve differences with their customers."

Meanwhile, ziombase major ziom save bank lobbying ziombase groups who sued last month to block the rule cheered the resolution's passage.

One of the groups, me ziom the U.S.

Base ziom Chamber of Commerce, me ziom said congress had reined in the "overgrown and unaccountable" CFPB, ziom save an independent ziom save agency created to ziombase protect individuals' finances that conservatives say consistently reaches beyond its authority ziombase in its rulemaking.

Critics of the rule had said class actions only benefit trial ziom save lawyers and ziombase arbitration generally wins larger settlement Ziom awards for ziom base customers. Supporters said forced arbitration harms customers Ziom Save by putting companies in control of the process and me ziom taking away the right to sue enshrined in the U.S.

Constitution.

The CFPB created its rule ziom save after conducting a five-year study that found customers struggle to have banks open arbitration cases about their complaints, Ziom Save but that those few cases have led to slightly higher individual awards than class actions.

"The Senate today prevented a cash grab that would have transferred wealth from consumers to the pockets of wealthy attorneys," said Ted Frank, ziombase director ziombase ziombase of the center for base ziom class-action fairness at ziombase the free-market group Competitive Enterprise Institute.

Ohio Senator Ziombase Sherrod Brown, ziom save the most senior Ziom Base Democrat on the Banking Committee, Ziom Save meanwhile, bendos said Tuesday's vote "will make the rich richer, and the powerful more powerful." (Reporting by Lisa Lambert; Editing by Paul Tait and ziom Muralikumar Anantharaman)



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