MReport September 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 90 of 99

TH E M R EP O RT | 89 THE LATEST GOVERNMENT Senators Sound Off on Rule The congressmen are none too pleased about the legislation and its potential adverse affects on the very consumers it aims to protect. A rbitration can be looked at in two ways when it comes to the Con- sumer Financial Protection Bureau's (CFPB) recent rule. In the CFPB's eyes, it's helping consumers by allowing them to take banks to court when they're wrongly charged and not given a refund. But Senators are seeing it in a completely different way and have filed a resolution disapproving of the rule. "Members of Congress previously expressed concerns with the proposed version of the rulemaking—concerns that were not addressed in the final rule," said U.S. Senate Committee on Banking, Housing, and Urban Affairs Chairman Mike Crapo (R-Idaho). "The rule is based on a flawed study that leading schol- ars have criticized as biased and inadequate, noting that it could leave consumers worse off by removing access to an important dispute resolution tool. By ignoring requests from Congress to re-examine the rule and develop alternatives between the status quo and ef- fectively eliminating arbitration, the CFPB has once again proven a lack of accountability." According to Crapo, because the bureau didn't heed warnings from Congress, it is in- cumbent on Congress to overturn the ruling. And it's not just Crapo. Eight other Senators commented on the rule, saying, at its basics, that it just doesn't make sense. "If finalized, this rule would actually cost consumers more in the long run by pushing consumers into class action lawsuits as op- posed to arbitration," said Sen. Mike Rounds (R-South Dakota). "According to the CFPB's own studies, consumers receive, on aver- age, $32 in relief through class action lawsuits compared to $5,389 in arbitration. Additionally, the Office of the Comptroller of the Currency has said that this rule could increase the risk of litigation so much that it could adversely affect the safety and soundness of the banking system—the cost of which will ultimately be handed down to consumers." Besides Sens. Crapo and Rounds, Sen. Corker (R-Tennessee), Sen. Cotton (R-Arkansas), Sen. Perdue (R-Georgia), Sen. Sasse (R-Nebraska), Sen. Tillis (R-North Carolina), and Sen. Toomey (R-Pennsylvania) commented on the rule. Per the Congressional Review Act, Congress can over- turn an agency rule within 60 legislative days after submission with a simple majority vote. © 2016 Fair Isaac Corporation. All rights reserved. Is your migration plan ready? Learn more about FICO ® Score 9, the most current and predictive FICO ® Score. P R O U D S U P P O R TE R S E P T E M B E R 1 9 T H , 2 0 1 7

Articles in this issue

Links on this page

Archives of this issue

view archives of TheMReport - MReport September 2017