The Hill Op-Ed: The House Recently Sided with Big Banks over Consumers

by Martha T. McCluskey | August 07, 2017

This op-ed originally ran in The Hill.

Did you read the fine print when you signed up for your credit card, a loan on your car, or a new checking account? Chances are, you missed an important provision called a "forced arbitration clause." This provision says that if the bank or credit card company has made a mistake it refuses to correct, or even cheated you out of money, you cannot sue to attempt to get your money back. Instead, you must pursue your claim in a secretive, privately run forum called "arbitration." In contrast to the courts, the arbitration process is full of pitfalls that discourage people from bringing claims, has rules that disadvantage consumers, and, for the few consumers who prevail, provides inadequate compensation. And that's exactly why banks and lenders force you to use it.

It's also why last month, the Consumer Financial Protection Bureau (CFPB) took an important step to crack down on the abusive use of forced arbitration, issuing a rule banning some of these clauses – those blocking consumers from joining class action lawsuits with thousands of other victims of the same illegal banking practices. The CFPB's final rule focuses on such lawsuits, because, as the Wells Fargo fake account scandal demonstrates, this form of litigation is particularly important for consumers of financial services and products where the dollars at stake in their individual cases are not large enough to justify individual lawsuits.

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With Final Forced Arbitration Rule, the CFPB Continues to Advance the Public Interest

by Thomas McGarity | July 13, 2017
Earlier this week, the Consumer Financial Protection Bureau (CFPB) took decisive action to protect hardworking people who are cheated by banks or other financial institutions. Specifically, the federal agency issued a rule limiting what are known as "forced arbitration" agreements in the contracts we must all sign when we open a bank account or purchase certain kinds of financial products and services. Last year, scholars and staff at the Center for Progressive Reform authored a report that supported CFPB's efforts ...

House Continues its Anti-Consumer Crusade, Attacking Patients' Rights

by Matt Shudtz | June 13, 2017
To call the timing coincidental doesn't give House Republicans enough credit. Tomorrow, while the fallout from Attorney General Jeff Sessions' testimony about his connections to Russia dominates most Capitol Hill news coverage, the House will vote on H.R. 1215, a bill designed to strip injured patients of their day in court. Last week, the same legislators voted to undermine the Consumer Financial Protection Bureau under the cover of James Comey's testimony about President Trump's ham-fisted attempts to interfere in the ...

White Collar Crime and the Trump Administration

by Rena Steinzor | April 27, 2017
Cross-posted by permission from the Columbia Blue Sky Blog. The Obama administration had a mixed record on white collar crime. On one hand, it extracted $4 billion and a guilty plea from BP in the wake of the Deepwater Horizon spill. On the other hand, it allowed HSBC, then the fourth largest bank in the world, to sign a deferred prosecution agreement (DPA) over charges of laundering money for a Mexican drug cartel and serving as a banker for illicit ...

News and Observer Op-ed: Bill Would Weaken Neighbors' Ability to Be Compensated in Hog Farm Lawsuits

by Sidney Shapiro | April 05, 2017
This op-ed originally ran in the Raleigh News & Observer. The civil justice system in North Carolina exists to protect people and their property from unreasonable actions by others. One of the longest standing causes of action in civil courts is for nuisance claims, which allow you to bring suit when your neighbor creates a condition on their property that interferes with your ability to use and enjoy your property, such as excessive noise, poorly stored garbage that might attract ...

New CPR Report: Protecting the Rights of Victims of Defective Aircraft

by James Goodwin | November 30, 2016
Many Americans would likely be shocked to learn how lax government oversight of the manufacture and design of aircraft, such as airplanes and helicopters, has become. After all, any list of those areas of the economy that would seem to cry out for strict regulation would have to include aircraft production and maintenance, considering that when aircraft are defective or contain defective parts, the consequences are almost inevitably catastrophic and tragic.  Yet, in a 2004 audit, Congress' nonpartisan Government Accountability ...

It's Time to Give Customers of Financial Services and Products Their Day in Court

by James Goodwin | October 10, 2016
Originally published by the Oxford Business Law Blog. Reprinted with permission. Forced arbitration clauses are now almost impossible to avoid in consumer contracts for financial services and products ranging from credit cards to private student loans. Despite their ubiquity, most consumers aren't even aware of them. This is because companies frequently bury them deep in the lengthy fine print of their contracts, which they then offer to consumers on a 'take it or leave it' basis. Forced arbitration clauses warrant ...

Representing Workers Injured on the Job – A New York Perspective

by Katie Tracy | October 05, 2016
When it comes to worker health and safety, preventing injuries and illnesses is the number one goal. It was for this very purpose that Congress enacted the Occupational Safety and Health Act (OSH Act) and tasked the Occupational Safety and Health Administration (OSHA) with setting and enforcing strong workplace standards. But when preventative measures fail and workers are harmed, agency enforcement actions against the employer (while necessary) don't provide legal redress to workers or their families for the damages they've ...

Comments from CPR: Forced Arbitration Proposal Is Strong but Should Be Stronger

by James Goodwin | August 23, 2016
Yesterday, several CPR Member Scholars and staff formally submitted comments on the Consumer Financial Protection Bureau's (CFPB) proposed rule to limit the use of forced arbitration agreements in consumer contracts for financial products like credit cards and bank accounts.  CPR Member Scholars and staff have been tracking this rulemaking for over a year and in May 2016 published a report that assessed several key issues shortly before the CFPB released its proposal. In particular, our report evaluated the CFPB's preliminary ...

Statutory Standing After the Spokeo Decision

by Daniel Farber | June 21, 2016
One of the recurring questions in standing law is the extent to which Congress can change the application of the standing doctrine. A recent Supreme Court opinion in a non-environmental case sheds some light – not a lot, but some – on this recurring question. The Court has made it clear that there is a constitutional core of the doctrine with three elements: a concrete injury in fact, a causal link between the injury and the defendant's conduct, and a ...

New Paper: Americans Hurt By Forced Arbitration Agreements with Big Banks, Credit Card Companies

by Brian Gumm | May 04, 2016
NEWS RELEASE: New Paper Shows Americans Hurt By Forced Arbitration Agreements with Big Banks, Credit Card Companies Forthcoming Rule from Consumer Financial Protection Bureau Offers Some Solutions, but More Can Be Done to Protect Consumers Opening a checking account or using a credit card is an essential, everyday activity for many Americans, but most financial services are governed by pages of fine print, much of which is difficult to navigate and understand. As a new paper from the Center for ...

The Next Justice and the Fate of the Clean Water Act

by Daniel Farber | April 05, 2016
Every once in a while, we get reminded of just how much damage the conservative Justices could wreak on environmental law. Last week, Justice Kennedy created shock waves with a casual comment during oral argument. In a case that seemed to involve only a technical issue about administrative procedure, he dropped the suggestion that the Clean Water Act just might be unconstitutionally vague. It didn't seem to faze him that such a ruling would wipe out a statute that has been on ...

Clean Water Act Jurisdiction and the Changing Supreme Court

by Dave Owen | March 07, 2016
Since Justice Scalia’s passing, the blogosphere has been abuzz with speculation about how the changed composition of the Court will affect environmental law. This post adds a little more to that speculation. My focus is not the Clean Power Plan litigation, which has (justifiably) gathered much of the attention, but instead the litigation over the joint EPA-Army Corps Clean Water Rule. And my prediction is a bit different from most predictions about the Clean Power Plan. Here, I predict, that ...

Blankenship Convicted in Massey Coal Mine Disaster

by Rena Steinzor | December 03, 2015
Justice was done today by a hard-working jury in West Virginia that convicted Don Blankenship of conspiracy to obstruct federal mine safety rules.  This conspiracy was the primary cause of an enormous explosion that killed 29 men in the worst mine disaster in 40 years.  Although the jury was not presented with the question of whether Blankenship was directly responsible for the explosion, it did decide that he played Russian roulette with miners’ lives.  By underfunding efforts to comply with and harassing ...

Labor Board's New 'Joint Employer' Standard Offers College Football Players a Second Chance

by Katie Tracy | September 10, 2015
Marking a victory for workers, on August 27, the National Labor Relations Board (NLRB) issued a highly anticipated decision in the case of Browning-Ferris Industries, updating its overly restrictive standard for determining “joint employer” status for purposes of collective bargaining. The decision responds to the increasing reliance on contingent work arrangements that often involve multiple employers, and reflects the Board’s recognition that its application of labor law must be adjusted to address the realities of today’s economy. Much of the ...

Clean Air versus States Rights

by Daniel Farber | June 09, 2015
A sleeper decision by the D.C. Circuit upholds federal air pollution authority. The D.C. Circuit’s decision last week in Mississippi Commission on Environmental Quality v. EPA didn’t get a lot of attention, despite having a very significant constitutional ruling.  Since the constitutional discussion doesn’t start until about page seventy, after many pages of scintillating discussion of matters like the reliability of private air pollution monitors and the meaning of the word “nearby”, I guess it shouldn’t be a surprise that the case has ...

Corporate Crime Is Not 'Civil Disobedience'

by Thomas McGarity | May 26, 2015
Cross-posted with ACSBlog. The Wall Street Journal recently devoted nearly two pages of its Saturday Review section to an editorial by Charles Murray of the American Enterprise Institute urging American corporations to violate laws that they deem to be “pointless, stupid or tyrannical” as acts of civil disobedience.  The article, which is a capsule summary of his recently published book titled By the People: Rebuilding Liberty Without Permission,” betrays a profound misunderstanding of the concept of civil disobedience and a deplorable contempt for the laws that ...

GM and Its No Good, Very Bad Year

by Rena Steinzor | May 01, 2015
With the announcement that GM Chief Executive Officer Mary Barra received the outsized compensation of $16.2 million in 2014, what should have been a year of humiliation and soul-searching for that feckless automaker instead ended on a disturbingly self-satisfied note.  Purely from a public relations perspective, Barra worked hard for her money.  Appearing repentant, sincere, and downcast, she persuaded star-struck members of Congress that the company was committed to overhauling a culture characterized by what she called the “GM shrug,” ...

Access to the Courts

Despite ample evidence to the contrary, many conservatives argue that markets are self-correcting, and that manufacturers who produce shoddy products or that pollute the environment quickly lose customers and go out of business. They're wrong. Americans need access to the courts so they can hold corner-cutting corporations accountable for the harm they cause.

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