GOP Against Consumers Faring Better Using Class Actions—Vote to Repeal Consumer Protection Rule

News from Economic Policy Institute (EPI)

Many financial institutions use forced arbitration clauses in their contracts to block consumers with disputes from banding together in court, instead requiring each consumer to argue their case separately in private arbitration proceedings. Recently, members of Congress introduced legislation to repeal a new rule from the Consumer Financial Protection Bureau that restores consumers’ ability to join together in class action lawsuits against financial institutions.

Opponents of the rule have suggested that the CFPB’s own findings show consumers on average receive greater relief in arbitration than class action lawsuits. In a new fact sheet, EPI Policy Director Heidi Shierholz explains that this is enormously misleading. While the average consumer who wins a claim in arbitration recovers $5,389, consumers win only 9 percent of disputes. Overall, the average consumer who enters arbitration with a bank or lender is ordered to pay $7,725. Furthermore, Shierholz points out, evidence shows that allowing consumers to join together in court does not increase consumer costs or decrease available credit.

“The numbers couldn’t be more clear—class actions return hundreds of millions of dollars to consumers, while forced arbitration only pays off for banks and lenders,” said Shierholz. “Congress should side with the American people, not big banks, and vote down this capricious attack on consumer freedom.”


Fact Sheet • By Heidi Shierholz • August 1, 2017  Download PDF


The new arbitration rule from Consumer Financial Protection Bureau (CFPB) restores consumers’ ability to join together in class action lawsuits against financial institutions.

H.J.Res.111 – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by Bureau of Consumer Financial Protection relating to “Arbitration Agreements”.

This joint resolution nullifies a rule submitted by the Consumer Financial Protection Bureau (CFPB) regarding arbitration agreements.

(The rule regulates the use of arbitration agreements in contracts for specific consumer financial products and services. It prohibits the use of a pre-dispute arbitration agreement to prevent a consumer from filing or participating in certain class action suits. The rule also requires consumer financial product and service providers to furnish the CFPB with particular information regarding arbitrations.)

ROLL CALL VOTE 412:

  • Republican Mark Amodei voted FOR passage to repeal and thus deny those Consumer Protection rights for not just his constituents, but ALL Americans to enable his Corporate benefactors to profit from their customer abuses.
  • Democrats Ruben Kihuen, Jacky Rosen and Dina Titus voted AGAINST passage — to protect consumer protection rights

Based on five years of careful study, the July 2017 final rule stems from a congressional directive instructing the agency to study forced arbitration and restrict or ban the practice if it harms consumers. Many financial institutions use forced arbitration clauses in their contracts to block consumers with disputes from banding together in court, instead requiring each consumer to argue their case separately in private arbitration proceedings.

In recent weeks, members of Congress have introduced legislation to repeal the CFPB rule and take away consumers’ newly restored right to band together in court. Opponents of the rule have suggested that the bureau’s own findings show consumers on average receive greater relief in arbitration ($5,389) than class action lawsuits ($32). This is enormously misleading.

While the average consumer who wins a claim in arbitration recovers $5,389, this is not even close to a typical consumer outcome. Why? Consumers obtain relief regarding their claims in only 9 percent of disputes. On the other hand, when companies make claims or counterclaims, arbitrators grant them relief 93 percent of the time—meaning they order the consumer to pay. If you consider both sides of this equation, in arbitration, the average consumer is ordered to pay $7,725 to the bank or lender. That’s right: the average consumer ends up paying financial institutions in arbitration.

But let’s consider the consumers who do win in arbitration. How do those numbers stack up against class action lawsuits? In an average year:

  • At least 6,800,000 consumers get cash relief in class actions—compared with just 16 consumers who receive cash relief in arbitration, according to available data.
  • Consumers recover at least $440,000,000 in class actions, after deducting all attorneys’ fees and court costs—compared with a total of $86,216 in arbitration.

Banning consumer class actions lets financial institutions keep hundreds of millions of dollars that would otherwise go back to harmed consumers every year.

The financial industry often claims that arbitration is cheaper and faster for consumers. How do these claims stand up to the data?

  • Consumers pay an average cost of $161 to file a claim in arbitration. Consumers generally don’t pay anything to join a class action.
  • Consumers typically wait 150 days for a decision in arbitration, compared with a typical wait of around 215 days for a conclusion in most class actions.

Arbitration is certainly not cheaper—especially considering the average consumer pays a bank or lender $7,725 in the end—and only a couple months faster.

Finally, opponents of the rule argue that allowing consumers to join together in court will increase consumer costs and decrease available credit. This claim is contradicted by real-life experience. Consumers saw no increase in price after Bank of America, JPMorgan Chase, Capital One, and HSBC dropped their arbitration clauses as a result of court-approved settlements, and mortgage rates did not increase after Congress banned forced arbitration in the mortgage market.

The numbers are clear: class actions return hundreds of millions to consumers, while forced arbitration only pays off for banks and lenders.

Sources: Consumer Financial Protection Bureau, “New Protections against Mandatory Arbitration,” web page accessed July 31, 2017; Sylvan Lane, “GOP Lawmakers Introduce Measures to Repeal Consumer Bureau Arbitration Rule,” The Hill, July 20, 2017; U.S. Senate Committee on Banking, Housing, and Urban Affairs, “Senators File Resolution Disapproving of CFPB Arbitration Rule” (press release), July 20, 2017; Consumer Financial Protection Bureau, Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a), 2015; Adam J. Levitin, “Mandatory Arbitration Offers Bargain-Basement Justice,’ American Banker BankThink (blog), May 13, 2014.

Unless otherwise hyperlinked, the data in this fact sheet are EPI computations of data from Consumer Financial Protection Bureau, Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a), 2015

Trump Announces He’s Kicking Thousands of Transgender People out of the Military

During his campaign for the presidency, this is where Donald Trump claimed he stood regarding LGBTQ “rights and beliefs.”

It appears he’s “lied” to the public yet again.  Without warning or explanation, President Trump announced on Twitter Wednesday morning that he is unilaterally reversing the military’s plan to allow transgender service:

While the tweets are lacking for details, they suggest that thousands of transgender people already serving in the military will lose their jobs. Last June, the Pentagon announced that they no longer had to hide in the shadows — that their positions were safe if they were public about their identities. That plan was to allow openly trans people to enroll starting July 1 of this year, but Defense Secretary James Mattis agreed to delay that implementation six months to allow for further review.

Meanwhile, conservative House Republicans have been attempting to find various ways to curtail this policy through amendments to the defense spending bill. Rep. Vicky Hartzler (R-MO) originally floated an outright banto transgender service, then ultimately advanced an amendment banning military funds from being spent on transition-related health care. That amendment was surprisingly defeated earlier this month by the Republican-controlled House in a close 209–214 vote. Nevertheless, Hartzler and others were continuing to explore additional options as of this week, apparently encouraged by Vice President Mike Pence.

In proposing her amendments, Hartzler repeatedly claimed that the medical costs to the military would be $1.35 billion over ten years. On multiple occasions, her office refused to respond to ThinkProgress inquiries to identify the source of that number, which is 16 times higher than the highest estimates provided by the RAND corporation in its report released along with the Pentagon’s policy change last year. RAND found that the military’s health costs would increase at most around $8.4 million per year, an increase of only 0.13 percent.

Since Hartzler started floating her bogus number, the Family Research Council, an anti-LGBTQ hate group, has estimated even higher numbers. This numbers game appears to have persuaded Trump to ignore the review and unilaterally decide to kick all transgender people out of the armed services. 19 other countries allow transgender military service — and have for some time.

On Tuesday, the Log Cabin Republicans highlighted an interview with new White House Communications Director Anthony Scaramucci proclaiming how “pro-gay” (albeit not pro-trans) the Trump administration is. Indeed, that has been the argument made by conservatives who claim to be LGBTQ-friendly throughout the campaign and well into this year. While it’s true Trump did mention LGBTQ people in his convention speech and once hold up a rainbow flag, he only ever made these references when fanning Islamophobia.

Though Trump appeared to be trans-friendly the first time he was presented with a question about North Carolina’s transphobic bathroom law HB2 during the campaign, his position quickly shifted and he began to claim that transgender inclusion is a “state’s rights” issue. As has been the case in just about every civil rights fight, “state’s rights” is code for “if a state wants to discriminate, let them.”

The administration’s other actions, such as rescinding the Obama administration’s guidance protecting transgender students in schools and working to reverse Obamacare’s guidance protecting transgender patients in health care, further demonstrate that Trump seems to have little concern for transgender people whatsoever.

The White House dubbed this week “American Heroes Week.” Secretary Mattis is notably out of the office on “personal travel.”


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe. ‘Like’ CAP Action on Facebook and ‘follow’ us on Twitter

Cruz Amdt is a Disaster for Healthcare … Nationwide

In rare joint letter, insurers say the Cruz amendment to the Senate Healthcare bill is “unworkable in any form” and will lead to “widespread terminations of coverage.”


No Change for Social Security Combined Trust Fund Reserves Depletion Year Says Board of Trustees

Disability Fund Improves by Five Years

 

The Social Security Board of Trustees today released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2034, the same as projected last year, with 77 percent of benefits payable at that time. The DI Trust Fund will become depleted in 2028, extended from last year’s estimate of 2023, with 93 percent of benefits still payable.

In the 2017 Annual Report to Congress, the Trustees announced:

  • The asset reserves of the combined OASDI Trust Funds increased by $35 billion in 2016 to a total of $2.85 trillion.
  • The combined trust fund reserves are still growing and will continue to do so through 2021. Beginning in 2022, the total annual cost of the program is projected to exceed income.
  • The year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then, is 2034 – the same as projected last year. At that time, there will be sufficient income coming in to pay 77 percent of scheduled benefits.

“It is time for the public to engage in the important national conversation about how to keep Social Security strong,” said Nancy A. Berryhill, Acting Commissioner of Social Security. “People understand the value of their earned Social Security benefits and the importance of keeping the program secure for the future.”

Other highlights of the Trustees Report include:

  • Total income, including interest, to the combined OASDI Trust Funds amounted to $957 billion in 2016. ($836 billion in net contributions, $33 billion from taxation of benefits, and $88 billion in interest)
  • Total expenditures from the combined OASDI Trust Funds amounted to $922 billion in 2016.
  • Social Security paid benefits of $911 billion in calendar year 2016. There were about 61 million beneficiaries at the end of the calendar year.
  • Non-interest income fell below program costs in 2010 for the first time since 1983. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
  • The projected actuarial deficit over the 75-year long-range period is 2.83 percent of taxable payroll – 0.17 percentage point larger than in last year’s report.
  • During 2016, an estimated 171 million people had earnings covered by Social Security and paid payroll taxes.
  • The cost of $6.2 billion to administer the Social Security program in 2016 was a very low 0.7 percent of total expenditures.
  • The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.2 percent in 2016.

The Board of Trustees usually comprises six members. Four serve by virtue of their positions with the federal government: Steven T. Mnuchin, Secretary of the Treasury and Managing Trustee; Nancy A. Berryhill, Acting Commissioner of Social Security; Thomas E. Price, M.D., Secretary of Health and Human Services; and R. Alexander Acosta, Secretary of Labor. The two public trustee positions are currently vacant.

View the 2017 Trustees Report at www.socialsecurity.gov/OACT/TR/2017/.

HUH? “Too Broke” for Healthcare But Can Easily Find $406B More For F-35

There always another $27 billion or lying around, it seems, when Lockheed Martin needs more money for expensive weapons system
 — by Jon Queally, staff writer

Whereas some argue, for example, that single-payer healthcare is impossible, those same voices remain “pretty quiet on the F-35 being a money pit.” (Photo: Forsvarsdepartementet/flickr/cc)

The nation’s most expensive weapons program isn’t done showing U.S. taxpayers how much it will ultimately cost them, with Bloomberg reporting Monday that the F-35 fighter jet budget is now predicted to jump by a cool $27 billion.

“Think about [F-35’s] $405 billion price tag when a family member dies of a preventable disease. Get angry.”

Though the estimated future cost of the program had previously hovered at a mind-boggling $379 billion, an updated draft that could be submitted to Congress as early as today will reportedly exceed $406 billion—a nearly 7 percent increase. Did you get a 7% increase in your annual paycheck?  I think not.

The new cost increases may come as a hit to President Donald Trump, who has bragged about his ability to get weapons manufacturers to offer the Pentagon “better deals.”

Rob Garver, national correspondent for the Fiscal Times, made the point this way:

Others simply pointed out how ridiculous it is that a weapons program so fraught with failures is allowed to receive such outlandish funding when lawmakers—mostly Republicans, but also many Democrats—continue to argue that the nation is “too broke” to increase spending on social programs that improve education or healthcare.

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Trumpka on the GOP’s Gutting of Healthcare

— Richard Trumka — President, AFL-CIO

We are—and always will be—stronger together. You’ve proved that again by standing united in opposition to the GOP health care bill.

More than 400,000 working people like you signed petitions aimed at Congress. More than 26,000 people made phone calls to their senator or representative urging them to oppose a health care bill that will leave 22 million Americans without the care they depend on. And thousands more of you showed up at events across the nation to speak up for all working families’ freedom to have decent health care.

Despite all we’ve done, the fight is far from over. You can help keep up the momentum by sharing this image with your friends and family.

Not only does this plan put millions of working families at risk of losing their care, it also would destroy 1.45 million jobs in the health sector in order to pay for more tax breaks for the wealthy.

Senate Majority Leader Mitch McConnell doesn’t have enough votes today to guarantee a win if he brings this terrible piece of legislation to the floor for a vote, because working women and men continue to take action. It’s up to all of us to keep it that way. Sharing this graphic right now on social media is a great, simple way to do just that.

AR Law Requires Any Woman Seeking an Abortion to get Permission from the Man Who Impregnated Her

— by Julia Conley, staff writer at CommonDreams

Arkansas legislators have drawn harsh criticism from women’s rights groups after passing four new laws that would severely restrict abortion access. (Photo: Steve Rhodes/Flickr/cc)

A hearing is scheduled for Thursday in the American Civil Liberties Union’s suit to block several new anti-reproductive rights laws that have passed in Arkansas, which would impose severe restrictions on women’s abortion access in the state.

The group has joined with the Center for Reproductive Rights to keep the laws from going into effect, starting at the end of July.

“Instead of protecting women’s health, Arkansas politicians have passed laws that defy decency and reason just to make it difficult or impossible for a woman to get an abortion,” said Rita Sklar, executive director of the ACLU of Arkansas. “They’ve created burdensome bureaucratic hurdles that invade patient privacy.”

The Tissue Disposal Mandate, or H.B. 1566, will make it illegal for a woman to terminate a pregnancy without informing the man who impregnated her. During Arkansas’ legislative session, the provision was added to the state’s Final Disposition Rights Act of 2009, which mandates that family members must agree what to do with a loved one’s body after a death. The law would apply to women who become pregnant in cases of rape as well as women who have consensual sex.

The law also states that any man or woman must be over the age of 18 in order to seek an abortion. In the case of a 17-year-old girl who is impregnated by an 18-year-old, for example, the decision would be entirely up to the male.

In addition to H.B. 1566, Arkansas recently passed laws banning a medically safe and effective abortion method known as dilation and evacuation; restricting access to abortion based on the sex of the fetus; and requiring doctors to preserve fetal tissue and notify police after performing abortions on anyone under the age of 16. The ACLU and Center for Reproductive Rights have strongly condemned the laws.

“Arkansas politicians have devised new and cruel ways to rob women of their right to safe and legal abortion this year,” said Nancy Northup, president and CEO of the Center for Reproductive Rights. “The Center for Reproductive Rights will continue to use the full force of the law to ensure these rights are protected and respected for all women.”

In 2015, the Institute for Women’s Policy Research ranked Arkansas as one of the worst states for women’s reproductive rights.

Trump USA’s Fast-Forward Decline in the World

“Donald Trump has pressed ‘fast-forward’ on the decline of the United States.” – Chris Uhlmann

This is the most brutal and succinct analysis of Donald Trump, the man and the scripted, fake President*. Take 2 minutes and watch this. Then, pick your jaw up and wipe your tears.

Source:  Read the full article at Crooks & Liars

HUD Secretary Carson Removed LGBTQ Housing Discrimination Protections from Website

U.S. Senator Catherine Cortez Masto (D-Nev.) led 28 U.S. senators in a letter to Housing and Urban Development (HUD) Secretary Ben Carson, urging him to reinstate resources that protect LGBTQ people from housing discrimination. These resources, designed to help housing providers comply with HUD’s nondiscrimination rules, were removed from HUD’s website in recent months.

“It is concerning that HUD apparently removed these tools from its website, which are meant to assist grantees in meeting their underlying obligations under the law,” the senators wrote. “Without these training resources, housing service providers will face additional challenges in trying to understand how best to meet the needs of their clients.  The guidance resources that were withdrawn or removed are critical to ensuring nondiscrimination rules are fully and faithfully implemented.”

LGBTQ people across the country face unique housing challenges, with 40 percent of LGBTQ youth representing all youth experiencing homelessness and with nearly 1 in 3 transgender adults who report having experienced homelessness at some point in their lives. According to 2016 HUD data, Nevada has the highest rate of unsheltered, unaccompanied homeless youth in the nation, making guidance for Nevada housing providers especially important. The resources that were withdrawn from HUD’s website provide critical guidelines and information to ensure that housing providers comply with HUD policies that protect LGBTQ people.

In Anticipation of Voter Suppression and Purges

— by Stephen Wolf and edited by David Nir. Daily Kos Elections Voting Rights Roundup email

In May, Donald Trump created a “Voting Integrity Commission” that we knew was purely a pretext to promote voter suppression nationwide. Now this panel has launched its opening salvo and confirmed its true purpose. The board is proposing to scrutinize each state’s voter registration records and intimidate the states into conducting voter purges—and it’s named America’s most prominent voter-fraud scaremonger to the commission itself. These actions are designed to give Trump and congressional Republicans an excuse to impose new voting restrictions at the national level.

Led by vice chair Kris Kobach, Kansas’ Republican secretary of state and one of the country’s foremost crusaders for voting restrictions, Trump’s commission has requested that every state send in its voter registration records in their entirety. For some states, these records would include voters’ names, addresses, birth dates, the last four digits of their Social Security numbers, party affiliation, the history of which elections they’ve voted in over the last decade, their registration status in another state, their military status, and whether they have felony convictions—in other words, quite a lot of personal information.

Although registration information is technically public, states have restrictions on with whom it can be shared and how, given the obvious privacy concerns with such sensitive data. While the federal government already has access to some of these statistics for every voter, the commission itself is required to make all documents it receives available to the general public, which would effectively defeat the attempts that the states have made to safeguard this information.

Kobach will likely abuse these registration records to demonstrate examples of the same person voting more than once in an attempt to claim that voter fraud is widespread. These examples will be bogus, though. Kobach has done this very same thing with his national “Crosscheck” system, which he’s convinced over 30 states to adopt. Crosscheck is notoriously riddled with inaccurate information, since it often compares just a few data points to suss out duplicate registrations, such as name and birthdate, leading to many false positives. (How many guys do you want to bet are named James Smith with a birthday of April 20? A lot, no doubt.) Election experts have estimated that Crosscheck could disenfranchise 200 valid voters for every one actual case of double registration that it eliminates.

Many Democratic state elections officials have refused Kobach’s request, while even a few Republicans have said they will only comply with the legal bare minimum and won’t submit private data. (Operative Matt Berg is keeping track of all the responses.) In a fitting ironic twist of incompetence, Kobach himself is unable to supply all of the requested information because of Kansas state law. Unfortunately, Kobach will likely enough get the information he needs from more pliant Republican officials in order to be able to falsely claim that voting irregularities are widespread.

Even if there were a legitimate reason to send the commission these records, Kobach was recently reprimanded by a federal court and fined $1,000 for “patently misleading representations” he made in a lawsuit over the contents of a document he was seen carrying that outlined proposed changes to federal voting laws. From the start, Kobach’s findings have been predetermined to support future voting restrictions.

As if Kobach weren’t awful enough, Trump also named Hans von Spakovsky to the commission. Spakovsky is perhaps the country’s most notorious promoter of the lie that voter fraud is widespread. As an attorney in the Justice Department’s Civil Rights Division under George W. Bush, Spakovsky played an instrumental role in politicizing the department to whip up the specter of voter fraud while greenlighting nascent Republican-passed voter restrictions like Georgia’s voter ID law over the objection of career DOJ employees. It’s really like they’re putting together the worst imaginable team of voter-suppression supervillains they possibly can.

Unfortunately, this commission is just one part of the Trump administration’s multi-pronged effort to impose new restrictions on voter registration. The Justice Department itself has played into this charade by sending a letter to the states warning them that it is “reviewing voter registration list maintenance procedures in each state” while querying them on how they plan to clean up their voting rolls. This action is another likely attempt at intimidation that will also encourage Republican-run states to purge their voting rolls, potentially disenfranchising many valid voters.

Meanwhile, congressional Republicans on the House Appropriations Committee have introduced a bill to eliminate the Election Assistance Commission; back in February, the House Administration Committee voted to do the same thing. This latest measure is part of the GOP’s budget proposal, which stands a good chance of passing. The EAC was created after the 2000 election debacle to help states run their elections, and it’s the only federal agency tasked with ensuring that voting machines aren’t vulnerable to hacking.

Yet rather than protect the country’s elections infrastructure from the very real threat of intrusion, the GOP is whipping up hysteria over nearly nonexistent voter fraud. This fear-mongering will likely serve as a pretext to amend the 1993 National Voter Registration Act, or NVRA, and more popularly known as the “Motor Voter” law. This would be the logical culmination at the federal level of the wave of GOP-passed voting restrictions that have swept state governments in the last decade.

If Kobach gets his way, congressional Republicans will amend the NVRA to require proof-of-citizenship for all voter registrants. Kobach and his allies in fact tried to require citizenship documentation in Kansas, leading to the suspension of one in seven new voter registrations until a federal court intervened last year.

This requirement is a solution in search of a problem, since Kobach himself has only successfully prosecuted one non-citizen voter ever. Many citizens don’t have easy access to the kinds of documents necessary to prove citizenship, and the requirement would utterly destroy the ability of civic groups to conduct voter registration drives, since people don’t exactly walk around around with their birth certificates in their back pockets.

Trump’s voting integrity commission is an unmistakable witch hunt that no one who believes in representative democracy should normalize. Those who support free and fair elections should urge their elected officials to refuse to comply with the commission’s request for voter registration records. Furthermore, Democrats like New Hampshire Secretary of State Bill Gardner should end their participation on the commission, since their service only helps to legitimize a partisan effort to suppress votes in order to unfairly win elections.