Krieger Rages "'America First' Is A Joke. Wall Street Wins Again"

Authored by Mike Krieger via Liberty Blitzkrieg blog,

I know I must sound like a broken record by now, but Wall Street owns the U.S. economy and until that’s dealt with, the American public will continue to be preyed upon voraciously and lawlessly by some of the most unethical parasites the world has ever seen. Obama was a historical disaster on this issue, coddling and protecting banker oligarchs every step of the way. Trump’s no different.

The latest evidence that things are getting even worse came last evening when the U.S. Senate voted to deliver Wall Street another gift on a silver platter.

Rather than summarize what happened, let’s turn to two of the best resources on such topics, journalist David Dayen and finance focused website Wall Street on Parade.

First, here are a few excerpts from David’s latest article published at The InterceptAfter Day of Feuding, Jeff Flake and Bob Corker Join Trump to Upend a Major Consumer Protection:

With national attention focused Tuesday morning on a mushrooming feud between President Trump and Sen. Bob Corker, R-Tenn., followed by a feud in the afternoon between Trump and Sen. Jeff Flake, R-Ariz., the Senate gift-wrapped the biggest present Congress has so far bestowed upon Wall Street in the Trump era.


With a razor-thin margin, the Senate passed a resolution to nullify a signature regulation from the Consumer Financial Protection Bureau, which banned forced arbitration provisions. Such clauses, tucked into the fine print of contracts that nobody reads, deny consumers the ability to contest claims through a class-action lawsuit, and can allow banks and other financial institutions to rip off their customers with virtual impunity.


Both Sens. Corker and Flake, along with Sen. John McCain, R-Ariz., joined in the effort to give Trump a major win, even if it will hurt many of his own voters. Consumer advocates had hoped that moderate Republicans Lisa Murkowski of Alaska and Susan Collins of Maine would block the GOP effort. They did not.


The vote was split 50-50, which required Vice President Mike Pence to break the tie.

How’s all that MAGA working out for you?

To secure his victory, Trump enlisted an ex-Wells Fargo attorney, Acting Comptroller of the Currency Keith Noreika, and  a former bank CEO, Treasury Secretary Steve Mnuchin, to do the dirty work. The Senate vote came a day after Treasury entered the fray with its guns blazing.

Reminder, Mnuchin was a Goldman Sachs partner.

The House passed its version of the resolution within just a couple weeks of CFPB finalizing the rule in July. But continuing reports of petty consumer fraud at Wells Fargo, and a data breach of over 140 million customer accounts at the credit reporting bureau Equifax, made it difficult for the Senate to proceed. Both Wells Fargo and Equifax have attempted to use arbitration clauses in their financial contracts to force victims out of class-action litigation.


The scandals put a human face on the practice of companies forcing customer disputes through a secret, non-judicial process.


And consumers typically don’t fare well in arbitration. An Economic Policy Institute report showed that consumers only win 9 percent of arbitration cases, and banks almost always win when they issue counter-claims, with the consumer paying $7,725 on average.


This is why corporations like the arbitration process – it prevents those wronged from pursuing their legal rights and in practice alters the law by making small claims virtually unenforceable. In other words, arbitration clauses are a license to steal. And it contributes to a fundamental breakdown of the justice system, where complaints can only be heard in a privatized setting.


So in July, in a rare instance of government using an outright ban instead of requiring disclosure or some other half-measure, CFPB finished a rule preventing arbitration agreements in financial contracts from stopping consumers who band together with other victims in a class-action lawsuit. But Republicans managed to twist the issue into one where corporations needed to be protected from greedy trial lawyers.


First, Office of the Comptroller of the Currency head Keith Noreika, himself a former defense lawyer for Wells Fargo who tried to push class-action suits into arbitration, argued the rule posed “safety and soundness” concerns for banks and would raise the cost of credit. Then this week, the Treasury Department, relying heavily on a discredited claim that plaintiff attorneys routinely shake down corporations with meritless claims, published a 17-page report attacking the CFPB rule.

Yes, because clearly the big problem in American society is corporations being shaken down. Have you looked at corporate profit margins lately?

The attacks from Trump’s executive agencies on a fellow regulator gave Senators the cover they needed to side with Wells Fargo and Equifax over their customers. The Senate first tried to sneak in a vote on the resolution when the political world was distracted by the health care debate, but that didn’t work. It took shifting the framing of the rule from being about victims to  being about trial lawyers for Senate Republicans to succeed.


Supporters of the CFPB rule like Public Citizen’s Robert Weissman called the vote a choice “between corporate donors and constituents.” Amanda Werner, who gained notoriety for dressing as the Monopoly Man during Senate hearings on Wells Fargo and Equifax, notes that lawmakers opposing the arbitration rule received over $100 million in campaign contributions from the financial industry during their careers. “These contributions help explain why lawmakers are willing to aid and abet big banks in ripping off their own constituents despite overwhelming bipartisan support for the rule,” Werner said in a statement to The Intercept.


The Chamber of Commerce and other financial lobbyists had joined together to sue CFPB over the rule, but with the Senate’s successful vote, that will no longer be necessary. President Trump is expected to sign the resolution. Not only would that nullify the arbitration rule, but CFPB would be unable to work on any “substantially similar” regulation without express consent from Congress.




As usual, there’s more. For that, let’s turn to Wall Street on Parade’s article, Mike Pence Secures the No Law Zone Around Wall Street:

Wall Street is the only industry in America that contractually bans both its customers and its employees from accessing the nation’s courts as a condition of opening an account or getting a job there. (That’s likely because it’s also the only industry that has the brazenness to let the top lawyers of the largest Wall Street banks meet in secret each year to plan their strategies for keeping their no law zone in force.)


Instead of being able to go to court with a claim of fraud (if you’re a customer), or a claim for labor law violations, like failure to pay overtime or sexual harassment (if you’re an employee), Wall Street makes its customers and employees sign an agreement to take all such claims into an industry-run or privately-run arbitration system.


These private justice systems are not cheaper and fairer as Wall Street’s shills (like the U.S. Chamber of Commerce) insist. Fees can run into tens of thousands of dollars as opposed to a few hundred dollars to file in court; and study after study has found that arbitrators most often rule in favor of the corporate interest over the consumer.


What Wall Street and its army of lawyers like most about these private justice systems is that they are dark. Unlike a public courtroom, the press and the public are not allowed to attend the hearings. There are no publicly available transcripts of the hearings as there would be in court. Arbitrators are instructed that they do not have to follow legal precedent or case law but can rule from their gut; they are not required to write reasoned and detailed decisions so that an appeal of their findings can be made. In fact, it is next to impossible to bring a court appeal of an arbitration ruling because Wall Street’s biggest law firms have spent decades convincing the courts that these decisions must be permanently binding.


Another fatal flaw in these private justice systems is that there is no jury selection from a large public pool of random citizens but rather a repeat-player pool of highly compensated arbitrators.


Wall Street’s own industry-run arbitration system also makes good use of the repeat player advantage. On July 20, 2000 the Public Investors Arbitration Bar Association (PIABA) issued a press release accusing the National Association of Securities Dealers (NASD) of rigging its computerized system of selecting arbitrators.  The statement read: “In direct and flagrant violation of federal law, the NASD systematically evaded the Securities and Exchange Commission approved ‘Neutral List Selection System’ arbitration rule requiring arbitrators to be selected on a rotating basis.  Instead, the NASD secretly programmed its computers to select some arbitrators on a seniority basis – just what the rule was designed to prevent.”


PIABA discovered the manipulation when a team of its attorneys demanded a test of the selection system at an NASD/PIABA meeting in Chicago on June 27, 2000.  PIABA predicted that “this rule violation tainted hundreds or even thousands of compulsory securities arbitrations  –  many still ongoing.  In every such instance, the substantive rights of public investors to a neutral panel have been cynically violated.  Many public investors were thus twice cheated: first, by an NASD member firm that fraudulently conned them out of their life’s savings, and second by the NASD Arbitration Department’s rigged panels.”

I may not know much, but I know this won’t make America great.

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ludwigvmises Wed, 10/25/2017 - 19:46 Permalink

Trump is using the NFL and other non-sense to distract the public about the failure about his main policy pushes: No wall, no tax reform, no Obama health care ripoff reform. Nothing! Total standstill. He's a lame duck.

ebworthen Gaius Frakkin'… Wed, 10/25/2017 - 20:47 Permalink

As if the CFPB and .gov were going to protect anyone.What they are getting rid of was forced class-action suits that benefited Lawyers, not consumers.Dodd-Frank was a symbolic nothing-burger.  We'll know Trump and/or Washington D.C. are thinking about citizens when they restore Glass-Steagall and quit bailing out the banks/corporations/insurers for fucking up everything while getting rich and screwing us plebeians over a barrel.

In reply to by Gaius Frakkin'…

BobEore Gaius Frakkin'… Wed, 10/25/2017 - 22:36 Permalink

\u/ are right of course.
Mikey failed to pick up n wear - 24/7 - the rose-colored glasses which the Trumpeting TRUMPTARDIAN legionnaires here use to peer out from their foxholes with ... on a threatening world which

daily conforms less and less to their expectations of seeing

a Goldmanite Gubbernment, headed by a Lansky/Cohn protege puppet POTUS... drain swamps///abstain from moar wars///roll back corporatocracy///fight for the lil guy///impose 'sound money doctrine on the FED///AND

make amerika grate again... under the whip of

swamp creatures at war with American lil guys using their weapons of mass indebtedness of the taxpayer and free rides for corporatocracy!

I asks youse - "who coulda seen it coming?"

Welcome to your MAGA dystopian paradise - MAGGOTS! - u ate the poisoned candy... you pooped unicorns in ur own soup!

t0 yUr BUttONs/MutTONs

In reply to by Gaius Frakkin'…

earleflorida 4johnny Wed, 10/25/2017 - 20:45 Permalink

personally, i find trump a "Deplorable"...he's stiff'd his ways in getting wealthy,... he's a entertainer gaming what little trust he has left---...remember this, it didn't take much for clinton to implode--- i'll leave that for the genius's on ZH to figure out!i seriously believe that he will be the POTUS that sinks the nation into bankruptcy which he is an expert on!!!He's a fucking loudmouth scumbag and this bannon fellow,...our savior, is a 'Whited`Sepulcher' in a Money Kings`ploy ready to spring its 'Thucydides Trap'! 

In reply to by 4johnny

nmewn Wed, 10/25/2017 - 19:50 Permalink

Lost what remaining respect I had for Kreiger with his last article of kumbaya nonsense "Why can't the left & right get alooongah? Sniffle. Soft sob." 

Bigly Wed, 10/25/2017 - 19:51 Permalink

I am not a patient person. And I know there is no human alive who can right all the corrupt wrongs. In the last week or two I think he has picked up some steam.He (stupidly) is surrounded by traitors and in quicksand but if he can pick up some momentum maybe in the next year he can check some boxes.

NoWayJose Wed, 10/25/2017 - 19:52 Permalink

If the CFPB is in place 'now' then how can we have all these Wells Fargo fiascos? Wouldn't it imply that the current CFPB is not working and 'should' be repealed?

Forbes NoWayJose Wed, 10/25/2017 - 20:14 Permalink

Their powers (CFPB, gov't alphabet agencies) are never enough. The CFPB action (overturned by Congress) is a gift to the tort bar--class-action attorneys who go forum shopping to get the best deal for themselves. Attorneys get millions, the harmed public gets discount coupons--because any actual harm was quite small.Wells Fargo opened an account in your name...and what? What harm? You don't know about it and it's never used. Certainly unethical. Probably a form of fraud/misrepresentation. WF should be fined, and be embarrassed, suffering loss of reputation, etc. Completely unnecessary for the tort bar to have their pockets lined with millions.Is Mike Kreiger taking money from the tort bar to push this nonsense. If not, he should seek help before he hyperventilates into a cardiac event...  

In reply to by NoWayJose

EmeraldWI Wed, 10/25/2017 - 19:53 Permalink

Donald just likes to win. If the senate owes ALEC legislation to their paymasters, he's happy to help them win. Plus he has always owed a bank or two or three.

Rebelrebel7 Wed, 10/25/2017 - 19:59 Permalink

Arbitration should not be forced. No, Wall St. is not the only industry that is doing this! It is pervasive and is practiced in many areas  from builders, to employers! Forced arbitration clauses should be abolished! 

gdpetti Wed, 10/25/2017 - 20:16 Permalink

Well, the simple reason is that all of them are members of one or other branches of the same club... in the case of Trumpy, he's not establishment DC, but he's still one of the gang: An inquiry into the background of flamboyant American entrepreneur Donald J. Trump provides some surprising insights into Trump’s path to power and influence, for the fact is that Trump’s rise to stardom came as a direct consequence of his having functioned as hardly more than a colorful front man for some very wealthy behind-the-scenes sponsors. Everyone knows, of course, about Trump’s gambling operations and of the wide-ranging links of the gambling industry to organized crime. But the story is much bigger than that. In his own memoir, The Art of the Deal, Trump proudly described how in 1987 he bought his first casino interests when he purchased 93% of the voting stock in the Resorts International gambling concern. What Trump doesn’t tell his readers is what the late Andrew St. George reported in The Spotlight on October 30, 1978 (and in the previous September 25, 1978, issue): Resorts International was established and controlled by front men for the Rockefeller and Rothschild families and their “enforcers” in the Central Intelligence Agency (CIA) and its allied intelligence agency, Israel’s Mossad.[...] 

Cabreado Wed, 10/25/2017 - 20:21 Permalink

"Obama was a historical disaster on this issue, coddling and protecting banker oligarchs every step of the way. Trump’s no different."I like Mike very much, and he's a Patriot.But Mike is (still) playing Dear Leader here, and apparently doesn't know how the government was designed to work...and that in itself is a dangerous thing... likely the One thing that will preclude a big wrench in the trajectory.