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 ...

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 ...

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 ...

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 ...

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Tracy | Sep 15, 2017 | Workers' Rights

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Isaacson | Sep 05, 2017 | Environmental Policy

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