2019: Schweikert Voted To Against Requiring The CFPB's Prohibit Mandatory Arbitration Clauses In Certain Consumer Contracts As Part Of A Larger CFPB Reform Bill. In May 2019, Schweikert voted against a legislation that would have, according to Congressional Quarterly, "require[d] the Consumer Financial Protection Bureau to reissue a 2017 rule prohibiting arbitration agreements between consumers and providers of consumer financial products, such as credit card companies, that bar consumers from participating in class action lawsuits against providers." In addition, also according to Congressional Quarterly, "the bill, as amended, that would statutorily clarify and establish certain objectives, authorities, and offices of the Consumer Financial Protection Bureau. Among provisions related to CFPB organization and authorities, the bill would require the CFPB director to ensure each statutorily established functional unit of the agency performs its assigned duties and functions; require the director to provide 'adequate staff' to each unit to carry out these functions; and prohibit the director from reorganizing or renaming such units. It would statutorily reestablish a CFPB Office of Students and Young Consumers to inform students and young people about education-related savings, loans, and debt. It would statutorily authorize the CFPB Office of Fair Lending and Equal Opportunity to carry out any supervisory and enforcement activities regarding fair lending laws. It would statutorily designate the CFPB as the Consumer Financial Protection Bureau, replacing any references in federal laws and documents to the 'Bureau of Consumer Financial Protection.' Among other provisions, the bill would require the CFPB director to ensure the number and duties of political appointees on staff match those of such appointees at other federal financial regulatory agencies. It would add certain qualifications for CFPB consumer advisory board members, urging the CFPB director to appoint certain experts and representatives, including experts in consumer protection, community development, and fair lending, and representatives of communities 'significantly impacted' by higher-priced mortgage loans. It would require the CFPB database of consumer complaints to remain publicly available on the CFPB website. As an offset for its provisions, the bill, as amended, would reduce by a total of $38 million the amount of discretionary surplus funds that may be held by the Federal Reserve. [...] It would reinstate memoranda of understanding between the CFPB and Education Department regarding coordination of oversight related to federal student loans." The vote was on passage. The House passed the bill by a vote of 231 to 191. [House Vote 228, 5/22/19; Congressional Quarterly, 5/22/19; Congressional Actions, H.R. 1500]
2019: Schweikert Voted To Against Requiring The CFPB's Prohibit Mandatory Arbitration Clauses In Certain Consumer Contracts. In May 2019, Schweikert voted against an amendment that would have, according to Congressional Quarterly, "require[d] the Consumer Financial Protection Bureau to reissue a 2017 rule prohibiting arbitration agreements between consumers and providers of consumer financial products, such as credit card companies, that bar consumers from participating in class action lawsuits against providers. It would [have] repeal[ed] a joint resolution that overturned the 2017 rule. It would [have] also reduce[d] by $10 million surplus discretionary funds that may be held by the Federal Reserve." The underlying legislation would have reformed the CFPB. The vote was on the amendment. The House adopted the amendment by a vote of 235 to 193. The House later passed the underlying bill. [House Vote 226, 5/22/19; Congressional Quarterly, 5/22/19; Congressional Actions, H. Amdt. 263; Congressional Actions, H.R. 1500]
2017: Schweikert Voted To Disapprove The CFPB's Rule Prohibiting Mandatory Arbitration Clauses In Certain Consumer Contracts. In July 2017, Schweikert voted for a Congressional Review Act joint resolution of disapproval on the Consumer Financial Protection Bureau's rule prohibiting mandatory arbitration contracts in consumer contracts for financial services. According to Congressional Quarterly, "Passage of the joint resolution that would nullify and disapprove of a Consumer Financial Protection Bureau rule that prohibits mandatory arbitration clauses in consumer contracts related to financial services and products." The vote was on passage. The House passed the resolution by a vote of 231 to 190. President Trump later signed the bill into law. [House Vote 412, 7/25/17; Congressional Quarterly, 7/25/17; Congressional Actions, H. J. Res. 111]
The Hill: "The House Voted Tuesday To Repeal A [...] Rule [...] That Would Have Protected Consumers' Rights To Sue Banks In Class-Action Lawsuits." According to The Hill, "The House voted Tuesday to repeal a controversial new rule from the Consumer Financial Protection Bureau (CFPB) that would have protected consumers' rights to sue banks in class-action lawsuits. Lawmakers voted 231-190 to repeal the rule using the Congressional Review Act, a law that allows Congress to eliminate regulations within 60 days of their release and bars agencies from issuing similar rules in the future. Only one Republican, Rep. Walter Jones (N.C.), joined Democrats in voting against repeal." [The Hill, 7/25/17]
Arbitration Clauses Can Prevent Consumers From Joining Class-Action Lawsuits; The CFPB Said That Consumers Received More Than $1 Billion In Payments From Juries Compared To $360,000 From Arbitrators. According to The Hill, "The rule forces companies to write arbitration clauses included in contracts in ways that would not prevent consumers from joining class-action lawsuits. [...] Arbitration clauses are commonly included in customer contracts to help banks or businesses avoid lawsuits from consumers who say they have been defrauded or abused. [...] The CFPB reported that more than 34 million consumers received $1 billion in payments from lawsuits over the past five years, but that arbitrators awarded only a total of about $360,000 in relief to 78 consumers in two yearsof [sic] cases the agency studied." [The Hill, 7/25/17]
2016: Schweikert Voted For An FY 2017 Financial Services Appropriations Bill Which Effectively Blocked The CFPB's Mandatory Arbitration Rule. In July 2016, Schweikert voted to appropriate $21.7 billion for financial services and general government for FY 2017. According to Congressional Quarterly, the legislation would have "provide[d] $21.7 billion in discretionary funding for financial services and general government appropriations in fiscal 2017." Also according to Congressional Quarterly, the legislation would have "prohibit[ed] the CFPB from regulating pre-dispute arbitration agreements until it completes a study on arbitration agreements --- which would effectively block the CFPB's proposed arbitration rule that it released in early May. That proposed rule would prohibit credit card and other companies from including in their contracts mandatory arbitration clauses that prevent consumers from filing class-action lawsuits." The vote was on passage. The House passed the bill by a vote of 239 to 185, but the Senate took no substantive action on the legislation. [House Vote 398, 7/7/16; Congressional Quarterly, 7/7/16; Congressional Quarterly, 6/21/16; Congressional Actions, H.R. 5485]
2016: Schweikert Voted Against Allowing The CFPB To Implement Its Rule Restricting Pre-Dispute Mandatory Arbitration Clauses In Consumer Financial Products. In July 2016, Schweikert voted against an amendment that would have, according to Congressional Quarterly, "strike[n] the bill's provision barring the Consumer Financial Protection Bureau's ability to promulgate rules restricting pre-dispute mandatory arbitration agreements in consumer contracts with firms offering financial products." The underlying legislation was an FY 2017 financial services appropriations bill. The vote was on the amendment. The House adopted the amendment by a vote of 223 to 192. The House later passed the underlying bill, but the Senate took no substantive action on the legislation. [House Vote 360, 7/6/16; Congressional Quarterly, 7/6/16; Congressional Actions, H. Amdt. 1229; Congressional Actions, H.R. 5485]
2016: The CFPB Proposed A Rule That Would Restrict Financial Firms From Requiring Arbitration For Financial Products Such As Credit Cards Instead Of Allowing Class Action Suits. According to the Wall Street Journal, "The proposed rule would prohibit financial companies from including mandatory arbitration clauses in contracts with consumers as a way to block class-action lawsuits and force customers into private negotiations to resolve disputes. In other words, companies could no longer require consumers to waive the right to collectively sue their banks or credit card companies in court, although companies could still require individual complaints to be addressed through arbitration rather than a lawsuit. The proposed rules --- expected to take effect next year after a 90-day public comment period and the publication of a final rule --- would cover a wide range of products, including credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto and auto title loans, payday and installment loans, as well student loans." [Wall Street Journal, 5/5/16]
New York Times: Few People Go To Arbitration When A Class-Action Suit Is Blocked. According to the New York Times, "For years, that assertion was largely anecdotal, since there is no federal database that tracks arbitrations. But in a yearlong investigation, The New York Times created its own database showing that despite the industry's claims, few people ever go to arbitration once their effort to build a class-action case is blocked. The numbers are particularly stark when they involve disputes for small amounts, like questionable bank fees and overcharges. The Times found that from 2010 to 2014, only 505 consumers went to arbitration over disputes of $2,500 or less. That is a minuscule fraction of the tens of millions of Americans whose financial contracts include arbitration clauses. Among the class actions quashed was a case brought by Citibank customers, who accused the bank of duping them into buying insurance that they were never eligible to use. And another, against American Express, was brought by a group of merchants who challenged the company's high processing fees." [New York Times, 5/5/16]
Industry Groups Such As The U.S. Chamber Of Commerce And The American Bankers Association Oppose The Rule. According to the Wall Street Journal, "Concerned about legal liabilities and costs, companies are fighting hard to stop the proposed rule. A number of industry groups have released statements urging the regulators to reconsider, including the U.S Chamber of Commerce, American Bankers Association, Consumer Bankers Association, and the National Association of Federal Credit Unions. They predict a boon for class-action lawyers and negligible benefits for individual consumers." [Wall Street Journal, 5/5/16]