Business & Real Estate

How the Democrats' "blue wave" could impact consumers

Regardless of your politics and which set of alternative facts you choose to believe, it’s hard to deny the country experienced a “blue wave” in the Nov. 6 midterm elections, with Democrats taking the U.S. House of Representatives.

My immediate reaction as a consumer advocate and columnist was to wonder how the wave might affect consumers and legislation moving forward. So I checked in with my friends to ask their opinions.

Consumer attorneys are a strange breed. While we enjoy the trappings of success as much as any other professional out there, we knowingly, in many cases, agree to take less, even when the other side “would have paid you much better,” stealing a line from Captain Renault in “Casablanca.” We love to fight the good fight and we are more social engineers than folks who prey on the misfortune of others. This may result in the General Motors, Mercedes-Benz and Ford defense attorneys having much nicer offices, but for the most part, consumer attorneys get a better night’s sleep more often, or so I keep telling myself.

Impending legislation

President Donald Trump rode into office on a few different waves himself. One line of thinking was he would “shake things up” by “draining the swamp” and by appointing the “best people.” So early on, he appointed Mick Mulvaney to take control of the Consumer Financial Protection Bureau, formed in response to the 2008 financial crisis to protect consumers going forward. Mulvaney, who had a history of being hostile to the CFPB, assumed control and immediately shut down multiple investigations into larger banks like Wells Fargo that had promised to refund millions of dollars to consumers who’d been wronged.

When I asked a few folks who work in the field about the “blue wave,” not surprisingly, I heard little about health care or immigration, the two allegedly most important issues in the election. Instead, I heard mostly about student loans, forced arbitration and the possibility of any pro-consumer legislation advancing.

One fine attorney from Florida told me the bipartisan SIMPLE Act would now more than likely receive consideration. The act aims to make it easier for people with student loans, primarily those making income-based payments, who need to report their annual income each year to the U.S. Department of Education. If the legislation passes, they will no longer need to – instead, the Department of Education and the IRS would automatically share information, simplifying the process.

Fellow consumer attorneys opined in both directions as to whether the new House majority would now be able to advance pro-consumer legislation or the Senate would block it. One man who has more than two decades of experience working against forced arbitration and has argued dozens of cases before the U.S. Supreme Court and other courts around the country, said that while some may want to add a rider to “must pass” legislation, it may be unwise to force it down the throat of the other side. He noted progress – slow progress – in saving consumers from the evils of forced arbitration.

It is now unlawful for any company that does more than $2.5 million in business with the military to have a forced arbitration clause in its employment agreements. Car dealers no longer have to arbitrate their disputes with car manufacturers. In most cases, though, consumers still have to arbitrate their disputes with car dealers. In California, a very blue state, we are still considering multiple ways to limit forced arbitration in the workplace.

The general consensus of my consumer advocate friends on the potential impact of the wave is, like most things legal, “it depends.” We don’t yet know who the new Speaker will be, or how or if the House will work with the Senate and the president. But we do expect that to some extent, things should look up for consumers on the legislation front, and hopefully there will be bipartisan support for consumers going forward.

Scott Kaufman is a consumer-protection attorney and founder of California Lemon Lawyers. For more information, call (408) 727-8882 or stop by his office at 140 Third St., Los Altos.

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