WASHINGTON–With credit unions also weighing in on the issue, more than 100 consumer protection, civil rights and organized labor organizations have filed a comment asking the CFPB to create a rule to restore the right of Americans to decide to file a case in court rather than be “forced into arbitration by big banks and other financial services corporations.”
“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 who is chosen by the bank,” the organizations said in a statement. “When banks and financial services corporations break the law and cheat consumers, they have the upper hand every time, which allows them to sweep efforts to gouge their customers under the rug and avoid public accountability.
‘Meaningful Opportunity’
In the letter, the coalition of organizations stated, “Consumers must be given a meaningful opportunity to choose, after the harm has occurred, how to proceed when they have been harmed or defrauded by a financial institution, whether through arbitration or through the public courts. Restoring these critical consumer rights and allowing consumers to make the choice on how they wish to exercise their rights is the only path forward toward ensuring full accountability and fairness in the financial marketplace. We urge the Bureau to issue a rulemaking addressing forced arbitration and restoring a consumer’s right to choose how to resolve disputes.”
The organizations further argued that the 17,000 petitions submitted to the CFPB are further evidence of the grassroots support for their request.
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