Financial Choice Act 2 Draft Now Out: More Like a Bank Protection Act

by Jeff Sovern

Here.  As previously reported on the blog, it would eliminate the CFPB's power to stop unfair, deceptive, or abusive practices (section 736)–that is, the power the Bureau used to stop Wells Fargo from opening sham accounts–and to regulate arbitration (section 738)–that is, the section that would give the CFPB the power to preserve class actions against bad actors in the financial industry. So if another bank wanted to do what Wells did, the Bureau and private plaintiffs who wanted to bring a class action would be powerless to do anything about it.  Of course, the Office of the Comptroller also fined Wells.  But it was the CFPB that brought the OCC into the matter and the OCC has now issued a report indicating that it knew about the problem as early as 2005–eleven years before it brought its enforcement action.  The bill has many other defects as well. The House Financial Services Committee will hold a hearing on the bill next Wednesday. No word on who the witnesses will be.  While the House may pass the bill, the Senate is less likely to do so, at least in this form, as long as the bill is subject to a filibuster.

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