CFPB Director Pens Letter Urging President to Veto Measure Rescinding New Arbitration Rule

On Monday, Consumer Financial Protection Bureau (“CFPB”) Director Richard Cordray released a letter addressed to the President of the United States urging him to veto House Joint Resolution 111. The measure, which rescinds a new CFPB rule that prohibits most credit card issuers and banking institutions from requiring consumers to enter into mandatory arbitration agreements that bar collective action lawsuits, was narrowly passed by the Senate after the Vice President cast a tie-breaking vote last week.  The bill was presented to the President for his signature the following day and the measure was signed into law on November 1st.

In the letter (from the Los Angeles Times), Director Cordray made a personal appeal to the President stating in part:

Many have told me I am wasting my time writing this letter that your mind is made up and that your advisors have already made their intentions clear. But this rule is all about protecting people who simply want to be able to take action together to right the wrongs done to them. When people are wronged or cheated, they deserve the chance to pursue their legal rights.

You and I have never met or spoken, but I am aware that over the course of your long career in business you often found it necessary to go to court when you thought you were treated unfairly. Of course, most Americans cannot afford to do this on their own, so they have to band together to be able to light companies like Wells Fargo that opened millions of fake accounts or Equifax when it allowed sensitive personal data to be breached for more than 145 million Americans.

I think you really don’t like to see American families, including veterans and service members, get cheated out of their hard-earned money and be left helpless to fight back. I know that some have made elaborate arguments to pretend like that is not what is happening. But you are a smart man, and I think we both know what is really happening here.

You alone now have the power to safeguard people’s ability to take action together and go to court when they are wronged. They deserve to have that right protected. I urge you to heed the views of the American Legion, the Military Coalition, and millions of Americans by vetoing the congressional resolution disapproving the arbitration rule. Thank you for your consideration.

This is not the first time Director Cordray has issued an unconventional appeal in support of the CFPB’s new mandatory predispute arbitration rule.  In August, he published an opinion piece in the New York Times in response to a United States House of Representatives vote to repeal the new rule.

The full text of the CFPB arbitration rule at issue is available on the CFPB’s website.

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