WASHINGTON – A coalition of consumer groups is applauding efforts in Congress to rein in the use of forced arbitration clauses by financial institutions and other financial services providers.
The statement of support follows a letter led by Sen. Elizabeth Warren (D-MA) and Rep. Hank Johnson (D-GA) and nearly 100 members of Congress in support on of a Consumer Financial Protection Bureau (CFPB) rule seeking to limit forced arbitration.
“Hidden in the fine print of everyday click-through agreements, terms and conditions, and other contracts, forced arbitration clauses trap consumers by mandating that their cases against banks can only be filed in a secretive process with a private arbitrator, chosen by the bank,” the organizations said.
Other Views
Among those sharing views:
- “Members of Congress are taking important steps to shine a light on these hidden fine print traps that rob consumers of their Constitutional right to access the courts,” said Shennan Kavanagh, senior attorney and incoming director of litigation at the National Consumer Law Center. “We are thrilled that Senator Elizabeth Warren and Representative Hank Johnson offered their support to the CFPB’s efforts to stop predatory lenders, fraudsters, unscrupulous banks, and other repeat offenders from escaping accountability when they wrong consumers.”
- “Every day, big banks rob consumers of their Constitutionally-protected rights through the use of forced arbitration. But thanks to leaders like Senator Warren, Representative Johnson, and nearly 100 Members of Congress, the voices of American consumers have a chance to be heard,” said Linda Lipsen, CEO of the American Association for Justice. “When big banks defraud consumers, they should not be allowed to hide behind these fine print traps, and I applaud these Members’ support for a new CFPB rule.”
Professors Send Letter
In addition, nearly 170 professors penned a letter supporting a rulemaking, submitted to the CFPB docket.
A coalition of more than 100 consumer protection, civil rights and organized labor organizations expressed support for the rule and submitted comments to the CFPB docket.
Nearly 20 military and Veterans’ groups also submitted a letter to the CFPB in support of a rulemaking.
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