The recent Equifax breach of data of over 143 million American consumers via efforts by hackers could have breathed new life into the Consumer Financial Protection Bureau’s (CFPB) recent anti-arbitration clause, according to a report by the Los Angeles Times.
The rule, which has been under the spotlight since its passing in early July, bars mandatory arbitration to allow consumers to proceed directly with class action law suits. Congress, especially Jeb Hensarling, who has long been at odds with CFPB Director Richard Cordray, has threatened to invoke the Congressional Review Act in order to overturn it. Many didn’t expect the ruling to go further.
However, Equifax may have given the rule new legs to stand on, given the way things have played out in recent days. First, according to the LA Times, after the news broke of the data breach, the company offered a year of free credit monitoring with the stipulation class action suits were forbidden.
Once the news broke that this was the case, Equifax amended their statement, saying enrollment in the free credit monitoring program ““does not waive any rights to take legal action.” They also said that enrolling in the free credit monitoring program would not automatically sign consumers up for the paid program.
Keith Noreika, the acting Comptroller of the Currency, had asked Cordray to delay the implementation of the ruling so the OCC could assess how it would affect the banking industry. Cordray was not receptive to the request.
It remains unclear as to how Equifax’s current slip-up will affect the success of the CFPB’s arbitration rule.