House Votes to Repeal CFPB Rule that Protects Consumers from Discriminatory Lending and Predatory Financial Products
Today the House of Representatives passed H.J. Res. 111, a resolution to repeal the new Consumer Financial Protection Bureau (CFPB) rule banning the use of class action waivers in the arbitration clauses of consumer finance agreements. The rule prohibits financial institutions from inserting class action waivers in the fine print of ordinary consumer agreements, and empowers consumers to band together to hold banks and lenders accountable when they violate the law. The rule is based on the CFPB’s exhaustive three-year empirical study, which found that class action bans serve to protect corporate wrongdoers engaged in predatory, fraudulent, and discriminatory lending practices.
Todd A. Cox, Policy Director at the NAACP Legal Defense and Educational Fund, Inc. (LDF), issued the following statement:
“This vote sends the sad message that preserving corporate wealth is more important to some members of the House of Representatives than protecting the rights of vulnerable Americans and eradicating racial discrimination from the economy. Today, discrimination in consumer financial markets remains a major driver of economic and racial inequality. African-American and Latino consumers are often the target of fraudulent and predatory financial products and are less likely to receive fair terms on personal and business loans. By protecting consumers’ right to bring class actions, the CFPB rule levels the playing field between individual consumers and big banks, and ensures that systemic discrimination can be rooted out and challenged in court. Fortunately, the House vote isn’t the last word, and we urge the Senate to reject this attempt to shield corporations from liability and to slam shut the courthouse doors on consumers’ civil rights protections.”
Founded in 1940, the NAACP Legal Defense and Educational Fund, Inc. (LDF) is the nation’s first civil and human rights law organization and has been completely separate from the National Association for the Advancement of Colored People (NAACP) since 1957—although LDF was originally founded by the NAACP and shares its commitment to equal rights. LDF’s Thurgood Marshall Institute is a multi-disciplinary and collaborative hub within LDF that launches targeted campaigns and undertakes innovative research to shape the civil rights narrative. In media attributions, please refer to us as the NAACP Legal Defense Fund or LDF.