Consumer Financial Protection Bureau Seeks to Restore Rights to Millions

The CFPB has outlined new draft rules for financial institutions regarding forced arbitration. As the New York Times reported:

For years, financial firms have tried to ward [class action suits] off by requiring customers to agree not to file class-action suits, but to take their disputes to arbitration instead. Now, the [CFPB]… is aiming to reopen the courthouse doors for tens of millions of people who have signed away their right to sue… “Companies are using the arbitration clause as a free pass to sidestep the courts and avoid accountability for wrongdoing,” Richard Cordray, director of the bureau, said in a statement.

Forced arbitration by companies is an unfair and unbalanced practice that revokes the rights of Americans to take their disputes to court.

American Association for Justice President Larry Tawwater said in a statement today, “Forced arbitration clauses grant corporations a license to steal and break the law, and should never be permitted in any setting,” and notes that “the plan fails to restore that same right to consumers wanting to pursue justice on an individual basis. The agency should strengthen its plan to ensure all consumers—whether joining with others or acting alone—have the right to hold corporations accountable when they break the law.”

It’s time to end forced arbitration by companies, once and for all.

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