Your Data is Valuable. Your Rights Mean Nothing.
You know what one of most glaring issues is today? No one looks out for the giants. Poor institutions like Equifax and Wells Fargo, always getting stepped on by the little guy. I applaud the Treasury Department for taking a courageous stand against the predatory consumer, always so avariciously eager for redress and restitution when their most sensitive data has been compromised by an organization they trusted, often through sheer negligence. The gall.
Yes, as you might have heard, on Monday this week the Treasury released a report in which the administration came out in opposition to an existing rule implemented by the Consumer Financial Protection Bureau. It was a rule written in the summer, one that facilitated class-action lawsuits for consumers by preventing credit card companies and banks from including mandatory pre-arbitration agreements in the fine print of contracts. This is all part of the CFPB’s mission, as the agency was created in the wake of the 2008 financial crisis to enforce existing laws and write new regulations, with a good amount of independence and discretionary power.
Following the study, what was expected next quickly came to pass. Last night, the Senate narrowly (51-50) voted to repeal the rule, further deregulating Wall Street by rolling back a policy created in the wake of the 2008 recession…caused by a deregulated Wall Street. Vice President Pence cast the deciding vote.
In its report, the Treasury states, “Based on (the CFPB’s) own data, it is far more likely that the rule will generate massive economic costs — borne by businesses and consumers alike — that dwarf the speculative benefits.” The department claims that the policy would have only led to $2.5 billion in lawsuits and only enriched the plaintiffs’ lawyers. As a result, the Senate surreptitiously dismantled the rule.
The response has been almost universally negative. According to Senator Sherrod Brown of Ohio, “By voting to take rights away from customers, the Senate voted tonight to side with Wells Fargo lobbyists over the people we serve.” Echoing this sentiment, the CFPB itself took the uncommon step of criticizing a fellow federal agency, with spokesman Sam Gilford saying that the Treasury’s report “fail[s] to make the case for allowing companies to continue using these clauses to deny consumers their day in court.” A CFPB spokeswoman also claims the study reflects the position of the banks.
Despite this broad condemnation, I think the defense of Equifax against voracious consumers is praiseworthy. Certainly not craven kowtowing at the expense of those whom these agencies are nominally supposed to serve and protect. After all, just look how much Equifax is still set to suffer as a result of their data breach. So dire is the situation, that SunTrust Robinson Humphrey analyst Andrew Jeffrey states, “Our view remains that Equifax’s core value proposition — facilitating underwriting, decisioning, marketing and risk management — remains intact,” and advises investors to buy stock. Wells Fargo Securities analyst William Warmington, Jr., saying “Megabreach creates opportunity,” believes that Equifax can absorb any settlements, legal, cybersecurity and customer service costs without much harm.
Truly, the picture painted is grim. Thankfully we have people brave enough to stand up to ordinary Americans, regardless of ethical integrity or responsibility. I’m sure consumers will appreciate it. I definitely hope they don’t see this bravery as contemptible spinelessness. Their data, like their rights, are in good hands.
Well, they’re in hands.