A Peculiar Brand Of "Populism" That Rewards Banks

In an earlier post, I touched on one of the Republican Congress' only two substantive achievements to date (including, of course, the stolen Supreme Court seat).  That was the repeal of a rule issued by the Consumer Financial Protection Bureau that gave consumers the right to file class-action suits against financial institutions, regardless of whether the consumers had previously agreed to settle all disputes with the institutions via arbitration. 

The CFPB's issuance of the rule, like the existence of the agency itself, was one of the results of the Dodd-Frank fnancial reform bill enacted by President Obama and congressional Democrats before the Tea Party revolt in 2010.  The agency was given the power, via Dodd-Frank, to study the abuses by financial organizations of binding arbitration provisions in consumer agreements.  These provisions, typically buried in the proverbial fine-print of these agreements, strip away all consumer rights to sue in court, either individually or via a class action.  In return, the arbitrators selected via the terms of the agreements are almost without exception pro-business both in their orientation and their rulings.

The repeal of the rule sailed through the House of Representatives, but ran into more trouble in the Senate, where Mike Pence was needed to break a 50-50 tie.  In any event, this repeal, which Donald Trump can barely wait to sign, now has GOP fingerprints all over it.

And that couldn't come at a worse time for the GOP, with Congress' approval rating in the dumpster and on fire, and the financial services industry coming under scrutiny again, thanks to the Equifax data breach and Wells Fargo's unauthorized opening of account.  In the short run, this is going to result in an entirely foreseeable lack of pressure on financial services companies to treat consumers responsibly, with the entirely foreseeable result of yet another crisis in the financial services industry, perhaps threatening the economy as a whole.

The Republican takeover of the federal government, first by the Tea Party and then by Trump, has been advertised as a form of populism, with the people taking back control from the insiders and the proverbial special interests.  As the repeal of the CFPB's rule illustrates, however, theirs is a very peculiar form of populism--an inverse form, one in which the insiders and special interests are actually allowed to reinforce their control over the people at the people's expense.

We can only hope against hope that progressives will stop fighting with each other and cease to re-litigate the results of the 2016 Democratic primaries.  We have a country to save.  We can only do it by coming together, and showing America what populism really is.