A rule governing how consumers can sue banks was officially repealed by the Senate in October, with the deciding vote cast by Vice President Mike Pence after a tie in the Senate of 50-50. Now, consumers will no longer have the option to pursue class-action lawsuits against banks. Instead, private arbitration will likely be the only avenue for consumers to seek justice against financial institutions that have wronged them. In the wake of this ruling, obtaining legal guidance from a Miami consumer protection attorney when pursuing a case against a bank is all the more important.
Background on the Rule
The Consumer Financial Protection Bureau (CFPB) brought forth the rule back in July, giving consumers the power to band together in a joint lawsuit against banks committing unlawful practices. Additionally, the mandate sought to put an end to clauses typically included within consumer contracts that restrict legal options for recourse. Namely, it robs consumers of their right to sue and requires that all matters be resolved through arbitration. The rule was set to be enacted in March of 2018, preventing lenders from including these often hidden clauses in contracts and opening the door to class-action suits.
Republican senators overwhelmingly voted to kill the rule, with only two submitting votes in its favor. Alternatively, all democratic senators supported the regulation with their votes. Nonetheless, it was not enough to keep the consumer protection measure alive. Those who struck it down cited the problems its enactment could bring small community banks. However, this does not negate the issues facing consumers who have been wronged by larger institutions.
Protecting Consumer Rights
Without the protections offered by the CFPB’s rule, consumers must be vigilant when entering into agreements with banks. The clauses that limit one’s options for legal recourse to private arbitration are prevalent in the financial industry, and often they are buried within the fine print of extensive documents. Therefore, when opening a new account or even applying for a credit card, it is essential that consumers have a full understanding of the agreement they are entering into.
For those who unknowingly entered into such agreements and were later taken advantage of by a lender, hope is not necessarily lost. While arbitration may be the only way to pursue cases against these banks, the process can still be navigated effectively with representation from a knowledgeable Miami consumer protection attorney.
Have you had your rights infringed upon by a bank? Our team is here to help. Give our office a call today to schedule a free consultation with one of our experienced attorneys.