While you were busy worrying about health insurance premiums and perhaps Donald Trump’s latest Tweet, the U.S. Senate spat in the face of American consumers this week.  In a 50-50 vote that required Vice President Mike Pence to break the tie, the Senate voted to nullify a pro-consumer rule that was more than a decade in a making. The rule was simple: it banned banks from sneaking language in common consumer contracts that forbid customers from joining together to sue them for misbehavior.

It’s an abominable decision that clearly picks banks and Wall Street over people. The drain-the-swamp president is set to affirm it.

If you look hard enough, you will find the Wall Street rhetoric used to defend the decision.  These arguments always go something like this: Don’t hurt banks, because if you hurt banks, you hurt people. I hope you aren’t falling for that.

I’ve been writing about mandatory arbitration clauses in standard-form contracts — also known as contracts of adhesion — for more than a decade.  They were invented by lawyers who do what lawyers do: Try to claim as much legal turf as they can, and see what they can get away with.  That’s all this is.

Bank lawyer 1: “How about we make it so people can’t really sue us, no matter what we do?”

Bank lawyer 2: “We’ll never get away with it!”

Bank lawyer 3: “Well, let’s see how gullible people are.”

Let’s get this straight: No consumer can sue a bank over a few dozen unfair fees. Not going to happen. You have to let people band together when the cheating is small. That’s the only way to get justice. That’s what class action lawsuits are for.

Here’s all you need to know about arbitration clauses that ban class action cases. When several consumers tried to band together and sue Wells Fargo over fake account creation, those cases were thrown out of court because of the arbitration clause.  Wells Fargo was able to commit outright fraud against its consumers, and enjoyed effective immunity from legal action by the victims.

That’s insane.

The other tired argument you’ll hear from supporters of the Senate vote….wait, time out….I’m quite certain there isn’t a soul alive who actually supported the rulemaking. It’s perfectly loopy.  Folks voted for it because they had to for some dark reason…but anyway, time in….the other reason senators gave for this week’s vote was this:

Consumers actually fare better in arbitration than in class action cases.

That’s a vile lie using an incredible distortion of the numbers, one so misleading you wonder how folks sleep at night.  The Economic Policy Institute dispenses with that lie here.

In recent weeks, members of Congress have introduced legislation to repeal the CFPB rule and take away consumers’ newly restored right to band together in court. Opponents of the rule have suggested that the bureau’s own findings show consumers on average receive greater relief in arbitration ($5,389) than class action lawsuits ($32). This is enormously misleading.

While the average consumer who wins a claim in arbitration recovers $5,389, this is not even close to a typical consumer outcome. Why? Consumers obtain relief regarding their claims in only 9 percent of disputes. On the other hand, when companies make claims or counterclaims, arbitrators grant them relief 93 percent of the time—meaning they order the consumer to pay. If you consider both sides of this equation, in arbitration, the average consumer is ordered to pay $7,725 to the bank or lender. That’s right: the average consumer ends up paying financial institutions in arbitration.

But let’s consider the consumers who do win in arbitration. How do those numbers stack up against class action lawsuits? In an average year, at least 6,800,000 consumers get cash relief in class actions—compared with just 16 consumers who receive cash relief in arbitration, according to available data.  Consumers recover at least $440,000,000 in class actions, after deducting all attorneys’ fees and court costs—compared with a total of $86,216 in arbitration.

Banning consumer class actions lets financial institutions keep hundreds of millions of dollars that would otherwise go back to harmed consumers every year.

Yes, it’s quite certain, class action lawsuits are imperfect. Anyone who’s received a 17-cent check as a “settlement” knows that. I’m all for fixing that broken system.  But granting banks like Wells Fargo a free and PERMANENT get-out-of-jail-free card for any misbehavior they undertake is deeply un-American.

And for those of you clinging to the idea that the new administration is based in populism — that somehow Donald Trump feels your pain, knows you’ve been ripped off in life and he’s on your side, well, I’d hope this is the last straw.  Republicans have reinstated the RipOffClause. It’s no more complicated than that.

Class action bans were snuck into our contracts under cover of fine print, slowly, over the course of years, like a virus. They favor the companies that write the contracts, period. Of course they do. Seeing the obvious benefit, corporate lawyers copied and pasted each other’s language until courtroom bans had essentially become the law of the land. It took years for lawyers and legislators around the country to figure out what was going on, and more than a decade of campaigning to simply return this situation back to normal. With a single vote, Vice President Mike Pence has eliminated all that good work and set consumer rights back a decade or more. Given the strength of bank and Wall Street lobbying, it might take another 10 years to fix this. Well, we’d better get started.

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originally posted at BobSullivan.net