LETTER – Leonard Lance Loves Financial Institutions

With daily disruptions and eruptions from the White House and the spectacle of Republican Senators vying for the Ebenezer Scrooge award for heartless cruelty to the old, poor, and disabled, it’s easy to lose track of other important things going on in the swamp. One we should all be concerned about is the House’s rapid action last week to negate a rule submitted by the Bureau of Consumer Financial Protection relating to Arbitration Agreements.

We need a little background here. Once upon a time, when people took out insurance contracts, bought stocks, or dealt with financial institutions they had the right to go to court for relief if they felt they were being screwed. Little guys could join a group of similarly screwed people under a class action suit against the screwer. Those suits frequently resulted in the screwer having to pay significant dollars to those screwed.

Such payouts hurt screwers’ bottom lines. They hired lawyers who solved the problem by requiring future screwees to sign agreements with “arbitration clauses” if they wanted to do business with the financial institution. The clauses said that, instead of going to court to solve a dispute, the potential screwee had to arbitrate the issue—usually with an arbitrator with a record of favoring financial institutions. It was easy to overlook that clause in a thirteen-page agreement printed in small gray type on yellow paper.

Millions of people signed those agreements without realizing they had given up an important right. Tens of thousands of them felt that had become screwees after going to Arbitration.

The Consumer Protection people thought that was unfair. So, on July 19, this year, they issued a final rule that said potential screwers could no longer use an agreement that contained an arbitration provision or any language that would prohibit their customers from joining a class action for relief. Screwees who had signed an arbitration agreement in the past were also protected. No longer would the little guy be denied his day in court.

With the speed of a ruptured duck, lobbyists working for financial institutions (the “screwers” in case you missed it) must have contacted our Congressman Leonard Lance and his Republican cohorts in the House. “We must protect people like Prudential, Goldman Sacks, and Chase Bank from dastardly potential screwees,” they said. The plea fell on receptive ears.

On July 25, six days after the rule was issued, Leonard Lance voted yes on a resolution to kill the rule. In lock step with the Trump administration. Now, if the Senate agrees, ordinary people will again loose the right to ask for help from our courts.

So, if you find an arbitration clause in the papers you must sign to buy stock, open a bank account, or buy insurance, thank your Congressman, Leonard Lance. And, in the fall of 2018, remember how he served you.

Rolf Margenau, member of Tewksbury Area Indivisible