Consumer Financial Protection Bureau Director Richard Cordray on Monday issued an unusual personal plea to President Trump to veto Congress’ attempt to kill a rule favoring class-action lawsuits, and argued that keeping the rule in place would protect families and veterans.
Cordray’s petition isn’t likely to be successful. Vice President Mike Pence cast the deciding vote last week in the Senate to undo the rule using the Congressional Review Act, which allows Congress to undo new regulations with just a simple majority in the Senate. White House advisers have recommended that Trump sign the resolution.
Cordray’s effort, however, highlights the significance of the so-called forced arbitration rule. That rule would prevent banks and other financial firms from inserting clauses into contracts that prevent customers from joining in class-action lawsuits, and instead force them into private arbitration. Republicans have charged that the rule would benefit trial lawyers rather than consumers.
In what he termed a “personal appeal,” Cordray wrote Trump that “I think you really don’t like to see American families, including veterans and service members, get cheated out of their hard-earned money and be left helpless to fight back. I know that some have made elaborate arguments to pretend like that is not what is happening. But you are a smart man, and I think we both know what is really happening here.”
Cordray also noted in his letter that Trump has made use of lawsuits during the course of his business career, casting the rule as allowing most Americans without Trump’s resources to do the same.
The finance industry strongly supports the resolution to end the rule, and lobbied hard to win over unsure Republicans to vote it through. All Democrats and two Republicans opposed the resolution, forcing Pence to break the tie in a late-night vote.