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Over 100 Groups Urge Consumer Bureau to End Banks’ License to Steal

On March 24, 2015, Other98.org joined over 100 groups to urge the Consumer Financial Protection Bureau (CFPB) to prohibit forced arbitration—clauses buried in the fine print of bank contracts that denies customers their day in court.

The letter, signed by 107 national, state and local groups, urged CFPB Director Richard Cordray to use the Bureau’s authority to write rules to prohibit forced arbitration clauses in contracts for consumer financial services and products under its jurisdiction. It notes that the CFPB’s forced arbitration study can be a barrier to consumers getting relief from class actions: the CFPB found that while only 600 consumers filed a claim in arbitration each year, roughly 34 million consumers could have been eligible for at least $1.1 billion in cash payments had they been able to pursue class action cases.

“The CFPB’s study confirmed that many consumers don’t even know that buried in their contracts is a clause that preemptively blocks their right to a day in court. Since most consumers do not have the resources to fight for small sums of money, they simply walk away if their bank harms them, as forced arbitration often prevents consumers from seeking relief through class actions.

Director Cordray must do the right thing for consumers: direct the Bureau to write strong rules banning the use of forced arbitration in bank contracts.” —Alexis Goldstein, Communications Director, Other 98

The letter follows petitions signed a by over 100,000 consumers calling on the five largest banks to voluntarily revoke their forced arbitration clauses, petitions that were delivered to Citibank headquarters last year:

You can read the complete letter at ConsumerAdvocates.org

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