Rule on Arbitration Would Restore Right to Sue Banks

The New York Times | May 5, 2016      The nation’s consumer watchdog is unveiling a proposed rule on Thursday that would restore customers’ rights to bring class-action lawsuits against financial firms, giving Americans major new protections and delivering a serious blow to Wall Street that could cost the industry billions of dollars.

The proposed rule, which would apply to bank accounts, credit cards and other types of consumer loans, seems almost certain to take effect, since it does not require congressional approval.

In effect, the move by the Consumer Financial Protection Bureau — the biggest that the agency has made since its inception in 2010 — will unravel a set of audacious legal maneuvers by corporate America that has prevented customers from using the court system to challenge potentially deceitful banking practices.

Honing their plan over decades, credit card companies, banks and other lenders devised a way to use the fine print of their contracts to push consumers out of court and into arbitration, where borrowers must battle powerful companies on their own. Without the ability to pool resources, most people abandon their claims and never make it to arbitration.

The new rules would mean that lenders could not force people to agree to mandatory arbitration clauses that bar class actions when those customers sign up for financial products. The changes would not apply to existing accounts, though consumers would be free to pay off their old loans and open new accounts that are covered.

And while those rules are not final yet — there will be a 90-day public comment period — financial industry lawyers say they are tough to derail.   Read more here.

House Passes Bill to Extend Veteran Foreclosure Protection

Law Passed Senate in 2015

HousingWire |  March 22, 2016      The House of Representatives passed S. 2393 yesterday to extend the one-year protection from foreclosure in the Servicemembers Civil Relief Act.  

The Senate already signed the bill in 2015, and will extend relief to veterans through 2017.

“Extending the one-year protection from foreclosure for another two-years allows service members and military families sufficient time to get on their feet financially and to avoid the stress of potentially losing their home as they manage their finances in a post-active military life,” said Housing Policy Council President John Dalton.   Read more here.

We've Learned Nothing From the Subprime Mortgage Meltdown. Here's Proof.

Los Angeles Times  |  Opinion  |  December 15, 2015     "The Big Short," which I saw over the weekend, is an entertaining movie. It's also deeply disturbing because one take-away is that we learned nothing from the stupidity and greed of the subprime mortgage meltdown.

Want proof? Look no further than a recent crackdown in the subprime sector by the Consumer Financial Protection Bureau.

The watchdog agency, which conservatives say is the embodiment of regulatory overreach, slapped Florida's Clarity Services Inc. and its owner, Tim Ranney, with an $8-million fine for illegally accessing the credit files of thousands of consumers nationwide.  Read more here.