WASHINGTON - Tuesday's big news from Washington was all about Arizona Sen. Jeff Flake saying he won't seek re-election next year. But there was a very close vote in the Senate on a bill that could have a major effect almost all Americans when it comes to suing banks and other financial institutions.
“And the joint resolution is passed,” said Vice President Mike Pence, as he broke a tie in the Senate.
The 51-50 vote made it harder for Americans to fight back against financial institutions that could be taking advantage of them. It overturned an Obama-era rule, set to take effect in March, that would have made it easier for consumers to band together and file class-action lawsuits against banks, credit card companies, mortgage lenders and other financial institutions.
This could affect consumers in a number of ways, including data breaches. One example is the Equifax hack that affected 143 million Americans.
In the wake of the breach, Equifax added fine print to its website that said consumers checking to see if their personal information was compromised would not be able to join a class-action lawsuit. Instead they’d have to take on Equifax in arbitration -- a process that usually goes in favor of big companies, not little consumers.
Equifax voluntarily ended up taking the arbitration clause out of fine print, but this rule could've forced Equifax to do that -- like it or not.
The rule also would have allowed class-action lawsuits against big banks, such as Wells Fargo, accused of deceptive practices. Again, now those fights will most likely happen in private arbitration.
As for U.S. financial institutions, they say the rule would have cost them billions, invited frivolous lawsuits and ultimately cost consumers more.
Those same banks earned $171 billion in profit last year.
The U.S. House passed the bill earlier this year and President Trump is expected to sign it.