CCH Financial Reform News Center

Securities Industry Concerned About Consumer Financial Protection Draft, Supports Draft Creating Federal Fiduciary Standard for Brokers and Advisers

By James Hamilton, J.D., LL.M., Principal Analyst, CCH Federal Securities Law Reporter; and CCH Derivatives Regulation Law Reporter.

The securities industry fears that draft legislation creating a Consumer Financial Protection Agency with broad new powers could inadvertently encroach on the jurisdiction of the SEC and CFTC. In testimony before the House Small Business Committee, The Securities Industry and Financial Markets Association (SIFMA) also said it favors draft legislation creating a new uniform federal fiduciary standard for brokers and advisers. However, SIFMA opposes the piece of the draft authorizing the SEC to prohibit pre-dispute arbitration clauses in broker-dealer and investment advisory agreements with retail customers.

Kucinich Applauds Bank of America for Abandoning Mandatory Arbitration

This story appeared in Bank Digest.

Rep. Dennis Kucinich, D-Ohio, Chairman of the House Domestic Policy Subcommittee, has praised the decision by Bank of America of its intent to abandon the practice of mandatory arbitration in all customer agreements: “I commend Bank of America for their decision today, and for taking the courageous step of being the first large bank to eliminate this abusive practice. My Subcommittee investigation and report into the practice of mandatory arbitration laid bare a hopelessly broken process that tramples consumer rights. Bank of America is right to take such bold action.”

Press Release at

http://domesticpolicy.oversight.house.gov/story.asp?ID=2570

Bank of America Letter to Rep. Kucinich at http://kucinich.house.gov/UploadedFiles/BofA_letter_to_Kucinich_081309.PDF

Rep. Kucinich Letter to Bank America at http://kucinich.house.gov/UploadedFiles/DP_letter_to_BofA_073009.pdf

Report Finds Litigation, More than Arbitration, Harms Consumers

This story appeared in Bank Digest.

A joint full committee and subcommittee Republican staff report “Justice or Avarice: The Misuse of Litigation to Harm Consumers“ finds that litigation, more than arbitration, harms consumers. The report was released in conjunction with an Oversight and Government Reform Domestic Policy Subcommittee hearing on Consumer Debt Arbitration.