ACSBlog

by Jeremy Leaming

There was an opening early in the 113th Congress to make life a bit tougher on the Senate’s band of obstructionists – through reform of the filibuster. But the obstructionists’ ringleader, Sen. Minority Leader Mitch McConnell (R-K.Y.), deftly avoided real reform by saying the Obama administration’s nominations to the lower federal district courts would be moved along more quickly.

But so-called reform has quickly proven rather lame. The president’s nominations to federal appeals courts as well as important executive branch positions remain in the cross-hairs of obstructionists who require a 60-vote majority before any action can be taken on those nominations or for that matter legislation.

On March 6 the Senate killed the president’s nomination of Caitlin Halligan for as seat on the powerful U.S. Court of Appeals for the District of Columbia. As Matt Vister noted earlier this week in an extensive piece for the Boston Globe the D.C. appeals court “has only seven out of 11 judges, the worst vacancy in its history and higher than any other federal circuit court nationwide. Obama has never been able to get a nominee on the court, symbolizing the Senate’s failure to approve nominations to dozens of courts nationwide.”

And the Senate’s obstructionists are again taking aim at the Consumer Financial Protection Bureau, which was created in part to prevent the shady practices employed by the financial industry, which helped usher in the Great Recession. Right-wing senators beholden to the nation’s superwealthy are demanding changes to the law that created the bureau or they will likely again filibuster Obama’s selection to head the bureau, former Ohio Attorney General Richard Cordray. Cordray was appointed to head the bureau during a recess of Congress. But an opinion from the D.C. Circuit – the court Obama has been blocked from appointing any judges – ruled earlier this year that the president’s three recess appoints to a hobbled National Labor Relations Board were unconstitutional. The Obama administration has appealed that ruling to the U.S. Supreme Court.

Because Cordray’s appointment was made during a recess, it will expire and he’ll still need to be confirmed. But Republican obstructionists are threatening to block Cordray unless the financial reform law is weakened.

Sen. Elizabeth Warren (D-Mass.) during a Senate Banking Committee yesterday blasted the obstructionism, saying, “I think that the delay in getting him confirmed is bad for consumers, it’s bad for small banks, it’s bad for credit unions, it’s bad for anyone trying to offer an honest product in an honest market. The American people deserve a Congress that worries less about helping big banks and more about helping regular people who have been cheated on mortgages, on credit cards, on student loans, on credit reports.” The Philadelphia Inquirer’s Jeff Gelles has more on Warren’s comments and a link to video of the hearing.)

Today TPM’s Brian Beutler reports that Obama during a meeting with Democrats this week “expressed his frustration with Republican slow-walking and filibustering of key nominees, and urged them to address the issue ….”

by E. Sebastian Arduengo

The Financial Industry Regulatory Authority or FINRA recently found that Charles Schwab, violated FINRA consumer protection rules by including provisions in customer agreements where customers waived their right to assert claims through the class action mechanism. The punishment for trying to structure a customer agreement that effectively allows Schwab to cheat their customers without fear of repercussion? A slap on the wrist.

FINRA's weak action was a result of the U.S. Supreme Court's opinion in AT&T v. Concepcion. The Court held that arbitration agreements that waived a party’s ability to bring a class action must be enforced, even if they were in “take it or leave it” contracts of adhesion, where the consumer had no choice but to agree if they wanted cell phone service. At the time, The New York Times noted “the decision … appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do … is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.”  

This brings us back to the FINRA decision, which is a perfect application of the litigation strategy outlined by The Times, and shows why Concepcion was such a terrific decision for corporate America (not so much for the rest of us). In direct response to the Supreme Court’s ruling in Concepcion , Schwab put new waiver provisions in their 2011 customer agreements, which covered close to seven million customers. The waivers that they put into the 2011 customer agreements were worded such that any customer claim against Schwab had to be arbitrated “solely on an individual, case-by-case basis.”