"Republican staff of the House Financial Services Committee have completed a legal analysis concluding there is sufficient basis for Congress to initiate contempt proceedings against Consumer Financial Protection Bureau Director Richard Cordray.
The staff report, which may be released as soon as this afternoon, describes how Mr. Cordray has defied a committee subpoena for documents related to his effort to ban arbitration agreements.
The arbitration ban itself was a Beltway beauty, designed to benefit the trial lawyers lining up to fund an expected Cordray run for governor of Ohio. Getting rid of arbitration as a way to resolve disputes between financial consumers and service providers would allow more class-action lawsuits.
A Journal editorial explained why the House voted last month to repeal the rule:
Mr. Cordray said the ban would protect consumers, but his own agency’s study suggests otherwise. Consumers who prevailed in arbitration recovered on average $5,389 while those who joined class actions received $32. Trial lawyers on average raked in $1 million...
Readers may also recall that Mr. Cordray’s bureau executed an appalling series of shakedowns against auto lenders, described in another editorial in 2015:
The regulators are simply guessing the race of borrowers based on their last names and addresses in the loan files and then claiming racism if the people they guessed were minorities seemed to be paying higher rates.Read on!
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