Today, during the same Senate Banking Committee hearing at which he admitted responsibility for his company’s defrauding of 3.5 million Americans, Wells Fargo CEO Tim Sloan also defended’s the bank use of “forced arbitration,” a mechanism used by big banks and credit card companies to deny customers legal protections as a condition for using services or products. This comes as Donald Trump, as well as Republicans in Congress, are also working to eliminate a rule implemented by the Consumer Financial Protection Bureau (CFPB) created after the 2008 financial crisis that protects customers from this very practice. This summer, the Trump Administration argued against CFPB’s rule, saying it “hurt financial institutions by increasing litigation expenses and compliance costs.”
This is just the latest example of the Trump Administration and congressional Republicans siding with corporations, big banks, and Wall Street lobbyists over hardworking Americans who have been victims of this practice and later found themselves unable to take legal action after being ripped-off.
“The Trump Administration and congressional Republicans are trying to gut a key protection that upholds the legal rights of consumers against abuses by large financial firms and now a big bank that defrauded 3.5 million Americans is coming to their defense,” said American Bridge spokesperson Andrew Bates. “That should speak volumes about whose side Trump and Republicans are on. Despite empty rhetoric about ‘draining the swamp,’ the Trump Administration is actually selling out middle class Americans on behalf of big banks and Wall Street. The country deserves better.”
VIDEO AND TRANSCRIPT:
SEN. SHERROD BROWN: I’m going to cut you off and I apologize because I want to follow up on that. And I appreciate the long, detailed answer, and I think it was made in good faith, but I also think that forced arbitration clauses always give the advantage to the employer, to the bank, as we know. We know that; that’s established fact. You’re still going to use those forced arbitration clauses to take advantage of your customers the way you did with the suit in ’13 and ’15 – suits in ’13 and ’15 – and the case against the customers in Utah. Why should we believe you’re committed to changing your bank’s practices and being fair to customers when you continue to use that behind-closed-doors arbitration system that clearly doesn’t allow customers their day in court?
WELLS FARGO CEO TIM SLOAN: Senator, the reason is because I think we’ve made fundamental changes to the way that we do business, so it will limit the number of times that that ever becomes an issue.
SEN. SHERROD BROWN: But that – limiting the number of times is good, I appreciate that, but give them their day in court, so those that you are not able to help or that you’re not able to satisfy.
WELLS FARGO CEO TIM SLOAN: Senator I look at that CFPB’s own study, and the CFPB’s own study said that arbitration is fast and efficient for consumers. And the CFPB’s own study said that consumers have better returns, higher resolutions with institutions.
SEN. SHERROD BROWN: A selective reading of the CFPB study, but keep in mind where the CFPB ultimately came out on that question.