President Ronald Reagan famously said, "the most terrifying words in the English language are: I'm from the government and I'm here to help." Who knows how that sentence would read if he were around for the passage of Dodd-Frank and its creation of the Consumer Financial Protection Bureau (CFPB).
Since its inception, the unelected, unaccountable and unconstitutional CFPB has advanced a radical agenda that has hurt the consumers it purportedly protects. This rogue agency and its unconstrained leader Richard Cordray have gone beyond enforcing laws to now creating them. Their capricious decision-making and abuse of power have killed competition and jeopardized economic liberty.
The CFPB's latest unilateral decision to increase consumer costs, reduce consumer choice and jeopardize consumer access to credit comes in the form of its "anti-arbitration rule," which effectively removes arbitration for consumers and forces class-action lawsuits upon them. The rule also mandates service providers give the CFPB their confidential arbitration records and court proceedings.
While this arbitration ban would benefit a handful of trial attorneys, it would drastically increase prices for consumers. According to the CFPB, its overreach amounted to an average payout of $32 for the consumers but millions for the lawyers. The same study showed arbitration resulted in an average recovery of $5,389 for consumers in a manner 12 times faster than litigation.
The CFPB study - like the law which allows arbitration clauses in consumer contracts - apparently was no hurdle for a leftist ideologue like Cordray, who moved ahead with the draconian prohibition on arbitration for consumers dealing with banks and other financial service companies. His action does not advance the public interest.
As Louisiana's chief legal officer - I want to ensure our state's consumers are protected from Wall Street and Washington alike. That is why I adamantly oppose the CFPB making consumers pay more for less with their latest flagrant federal power grab. I urge the U.S. Senate to follow the U.S. House's lead and use their authority under the Congressional Review Act to block the CFPB rule.
I encourage my fellow Louisianians to contact our senators, asking they rescind this rule and prevent a similar one from being enacted in the future. Reach Sen. Bill Cassidy by phone at 202-224-5824 or online at cassidy.senate.gov, and reach Sen. John Kennedy by phone at 202-224-4623 or online at kennedy.senate.gov. Together, we can stop this rogue federal agency and make government more open, accountable and responsive.
Attorney General Jeff Landry