By Sara Merken
Wells Fargo’s latest scandal is providing consumer groups new ammunition as they try to save a Consumer Financial Protection Bureau rule banning companies from using mandatory arbitration clauses.
Disclosures last month that the bank may have billed as many as 500,000 customers for unneeded auto insurance is just the latest scandal for the megabank, which last year disclosed it had opened millions of unauthorized deposit and credit-card accounts.
Consumer groups are invoking Wells Fargo as they seek to persuade a handful of Republican senators to help defeat a potential September vote on a resolution blocking the arbitration rule.
“We’ve definitely pointed to Wells Fargo as pretty much the poster child for why we need this rule,” Amanda Werner, campaign manager at consumer groups Americans for Financial Reform and Public Citizen, told Bloomberg BNA.
Lauren Saunders, associate director of the National Consumer Law Center (NCLC), told Bloomberg BNA that the NCLC is not limiting its advocacy efforts to specific senators.
The message they are seeking to deliver is that “voting for the resolution is a vote for Wells Fargo’s misconduct,” Christine Hines, legislative director at the National Association of Consumer Advocates, told Bloomberg BNA.
“Wells Fargo is a huge elephant in the room for industry and any of its congressional allies who want to shut the court house doors,” Hines said.
Werner said that state and local groups will raise the issue at lawmakers’ town halls during the congressional recess.
Americans for Financial reform is hoping to influence senators by pointing out that Wells Fargo “explicitly hid from Congress” information about insurance fraud from a July 2016 internal review when its executives testified before Congress in September 2016.
Wells Fargo declined to comment.
The House voted on July 25 to nullify the rule by using the Congressional Review Act (CRA), which gives Congress the authority to block rules that were enacted in the previous 60 legislative days. The CFPB published the rule on July 19.
Senate Republican leaders have given no indication of when they might hold a vote on the resolution after lawmakers return from the August recess on September 5.
One of the undecided is Sen. John Kennedy of Louisiana, who was the only Republican on the Senate Banking Committee who did not cosponsor the resolution.
“I am still studying that issue. I am not sure how I am going to vote on that,” Sen. Kennedy told Bloomberg BNA August 3.
Republican Sens. Lisa Murkowski of Alaska and Susan Collins of Maine, have also said they are undecided about the vote. Sen. John McCain (R-Ariz.) may not be able to vote as he undergoes treatment for brain cancer.
Sen. Lindsey Graham of South Carolina is so far the only Republican who has spoken out about opposing the resolution, telling the Wall Street Journal that arbitration is a “windfall for the companies in terms of how you settle their cheating.”
Graham introduced a bill in 2014 with Sen. Jack Reed (D-R.I.) to protect active service members who are forced to sign contracts with arbitration clauses from things like foreclosures and evictions, as well as limiting the interest rate they can be charged.
Saunders said the recent Wells Fargo scandals, as well as expressed support of the CFPB rule from service member advocates, makes her “increasingly optimistic” that senators will vote to uphold the rule.
To contact the reporter on this story: Sara Merken in Washington at email@example.com
To contact the editor responsible for this story: Seth Stern at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)