Regulator pens personal letter asking Trump to spare arbitration rule

Regulator pens personal letter asking Trump to spare arbitration rule
© Greg Nash

The director of the Consumer Financial Protection Bureau (CFPB) has written an unusual plea to President Trump, asking him to save the agency's rule on forced arbitration.

Richard Cordray wrote what he called a “simple, personal appeal” to Trump, asking him not to sign a resolution from Congress that would kill the CFPB rule.

“Many have told me that I am wasting my time writing this letter — that your mind is made up and your advisors have already made their intentions clear,” Cordray wrote.

“But this rule is all about protecting people who simply want to be able to take action together to right the wrongs done to them.”

Cordray states in the letter that he and Trump have never met or spoken, despite their 10 months of overlap in the government. 

“I think you really don’t like to see American families, including veterans and service members, get cheated out of their hard-earned money and be left helpless to fight back,” Cordray wrote.

"I know that some have made elaborate arguments to pretend like that is not what is happening. But you are a smart man, and I think we both know what is really happening here.”

Trump is widely expected to sign the resolution repealing the rule, which bans banks and credit card companies from blocking customers from suing them in class-action cases. Cordray wrote that he knew he had slim chances of changing Trump’s mind, but felt compelled to try.

The Senate voted to repeal the CFPB arbitration rule 51- 50 last week, after GOP leaders struggled to corral the votes. Vice President Pence broke the tie.

The House voted to repeal the rule in July, less than a month after it was first released.

The arbitration rule was a high priority for Democrats and CFPB allies, and its repeal would be a major blow for groups supporting tougher financial rules. The CFPB spent roughly five years total working on the rule, and its completion was a major goal of Cordray's.

Cordray’s letter also references Trump’s business career and long history of litigation.

“I am aware that over the course of your long career in business, you often found it necessary to to go to court when you thought you were treated unfairly,” Cordray wrote.

“Of course, most Americans cannot afford to do this on their own, so they have to band together,” Cordray wrote, citing Equifax and Wells Fargo’s recent scandals.

Republicans in Congress have long called on Trump to fire Cordray, who has led the CFPB since it opened in 2011.

The GOP critics say the agency is unaccountable and has hurt the U.S. economy and financial services markets. They have pushed legislation to overhaul the CFPB's structure so that it is no longer controlled by a single person, but that bill is opposed by Democrats.

While GOP and business critics say Cordray has pursued flashy enforcement in violation of the bureau's mission, Democrats laud him, citing the nearly $12 billion in damages the bureau has landed for consumers.

- This story was updated at 4:26 p.m.