“There is no moral or economic reason to deny people who have been harmed the right to sue in court. But Republicans keep trying to do so.” This quote by our managing partner, Attorney Robert Sachs, Jr., shows our passion for protecting citizens’ rights to sue financial institutions. However, not everyone shares our convictions. The Trump administration is trying to shut down a rule that would allow people to join together to file class action lawsuits against banks and other financial institutions. If the Republicans succeed in blocking this rule, thousands of victims of fraud and financial abuse would have to settle in arbitration, which almost always benefits the banks.
Here’s What You Need to Know
The Consumer Financial Protection Bureau is trying to pass a rule that will allow citizens to file class action lawsuits against financial institutions. Without this rule, banks can force citizens to settle complaints in arbitration, which often works in the interests of the banks. Bringing individual lawsuits against financial corporations is often too costly, so the best way to hold banks responsible is through class action lawsuits.
Keith Noreika, a bank lawyer appointed by Trump, tried to stall the rule by saying more time was needed to determine if the rule threatened the stability of the nation’s banking system. The Consumer Financial Bureau refused. The facts showed that the rule would cost around $1 billion a year for the banking system, which makes more than $171 billion per year. Thus, the rule would not destabilize the nation’s financial institutions. It would only keep them more accountable.