President Donald Trump has just signed the bill that revokes one of the few banking rules that help customers. This rule allowed individuals to unite their forces in a class action lawsuit in order to find a solution for their financial disputes. However, from now on the financial industry will be invulnerable to clients’ legal actions.
The President of the United States Believes the Free Market Should Be Subject to Few Restrictions
On Wednesday, the President of the United States signed a new measure in privacy. Journalists were not invited to witness this moment in the White House. The bill consisted of the voting result that repealed one of the Consumer Financial Protection Bureau’s regulations.
The banking industry has been lobbying for a long time now to see this rule gone. Now that Republicans lead the Senate, the long-awaited opportunity presented itself.
Trump administration is known for its support of an unrestricted free market. Donald Trump together with Republicans intends to undo those regulations that have the power to impair the evolution of the market.
The latest measure that the President signed revokes bank customers the right to file for lawsuits against financial organizations. Trump perceives these legal actions as frivolous hurdles for the financial sector.
The Financial Industry in the U.S. Will Deal with Arbitration Only from Now on
On the other hand, Democrats view this annulment as harmful for consumers. They no longer enjoy legal measures to signal and stop wrongdoings that their credit or card company apply to their personal finances. CFPB Chair Richard Cordray claimed that this event stole consumers’ right to resort to justice.
“This action tips the scales of justice in favor of Wall Street banks less than ten years after they caused the financial crisis.”
Trump’s repeal means that bank customers won’t be able to escape mandatory arbitration clauses anymore. They will have to respect the clauses that are usually present only in the fine print of any document they sign with their banks. These can be related to credit cards, payday loans, auto loans, and many other services that banks offer.
However, instead of sueing the companies to stand up for themselves, customers will only be able to resort to arbitration. This process is usually silent and often times ends in favor of financial institutions.
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