Word: GOP attacking power of the consumer

Dirt Diggers Digest - The Republican-controlled Congress and the White House are undermining both regulation and litigation. Virtually all legislative “accomplishments” since Inauguration Day have consisted of Congressional Review Act maneuvers to roll back business regulations. Now, with the Senate’s move to kill the Consumer Financial Protection Bureau’s restriction on forced arbitration, Congress has used the same device to reduce the ability of consumers to seek redress through the courts — what Sen. Elizabeth Warren aptly described as “a giant wet kiss to Wall Street.”

The result of these moves is that big business is increasingly being allowed to operate with no effective controls at all. This unilateral disarmament is taking place when corporate misconduct is rampant. Among the companies that will benefit from the arbitration move are the likes of Wells Fargo and Equifax, whose willingness to mistreat customers has been truly astounding.

We should be careful, however, not to overstate the effectiveness of damage awards in class action lawsuits in changing corporate behavior. It’s unfortunately true that large corporations have come to regard substantial monetary settlements as an acceptable cost of doing business.

That’s true both of private litigation and cases brought by regulatory agencies and the Justice Department. As shown in Violation Tracker, 40 corporations have paid $1 billion or more in fines and settlements. Seven of those have paid $10 billion or more, including all the giant national banks: Bank of America ($57 billion), JPMorgan Chase ($29 billion), Citigroup ($16 billion) and Wells Fargo ($11 billion).

These amounts have involved scores of different cases dating back to 2000. In other words, the banks are repeat violators that are willing to pay out large sums in order to continue doing business more or less as usual. More class action lawsuits are unlikely to change this dynamic.

It has become clear that these penalties alone are not going to put an end to the corporate crime wave. It’s time to go beyond damages in addressing the damage caused by these companies.