PROVIDING FOR CONGRESSIONAL DISAPPROVAL OF THE RULE SUBMITTED BY BUREAU OF CONSUMER FINANCIAL PROTECTION RELATING TO ARBITRATION AGREEMENTS
Mr. SCOTT of Virginia. Mr. Speaker, I rise in opposition of H.J. Res. 111, which will overturn the Consumer Financial Protection Bureau's rule, prohibiting forced arbitration for many consumer contracts, including student loan contracts.
Banks and large corporations often take advantage of ordinary Americans by burying forced arbitration clauses and boiler plate fine print in standard contracts.
When corporations force consumers to secretly arbitrate with handpicked firms, which rely on those same corporations for repeat business, the system is rigged.
Take, for example, Matthew, who enrolled in a for-profit aviation school that closed before Matthew could finish his degree. At the recommendation of the school, he had taken out $56,000 in private student loans.
With debt and no credential because the school had closed, Matthew joined a class action with thousands of other students. But due to a class action ban in the loan contract, the court ruled that thousands of individual students must individually settle their disputes with the bank in arbitration.
That means each individual student had to hire their own lawyer, take time off to present their case, and everything else you have to do to present a case. That is why most victims of this kind of fraud will never collect what they are owed.
If each victim only loses a little bit, virtually nobody will bring a claim. With the class action, at least you can achieve an injunction so the corporation will stop. Each plaintiff might receive a little bit, but without the class action, the corporation is free to
continue the fraud.
Without this rule, the banks will continue to use forced arbitration clauses to advance their special interests at the expense of innocent victims who will be ripped off.
Mr. Speaker, that is why we need to stand with consumers. I urge my colleagues to do that: stand with consumers, reject this repeal of the important rule, and vote ``no'' on H.J. Res. 111.