Van Hollen, Brown Introduce Bill To Protect Consumers By Banning Forced Arbitration
U.S. Senators Chris Van Hollen (D-Md.), a member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and Sherrod Brown (D-Ohio), Chairman of the Committee have introduced the Arbitration Fairness for Consumers Act, legislation to prohibit banks and other financial institutions from using forced arbitration clauses against consumers who want to seek restitution and justice. Today, during a hearing in the Committee, Senator Van Hollen highlighted the story of an 87-year-old Marylander recently impacted by forced arbitration provisions. A video excerpt of his remarks can be viewed here.
“Consumers who are ripped off by big banks or corporations should be able to seek fair redress but they are stripped of their right to their day in court by forced arbitration requirements that are buried deep in the fine print of purchase agreements,” said Senator Van Hollen. “I’m proud to join my colleagues in introducing legislation to protect consumer choice and ensure a more fair and transparent process for Americans seeking justice.”
“Forced arbitration clauses let big companies hide from accountability and silence victims, giving more power to Wall Street over workers and their families,” said Senator Brown. “Too many consumers miss these and are tricked into signing away to corporations their right to pursue justice. This bill will remove these clauses to finally end this abusive practice for financial products and services, and give Americans a fighting chance against powerful special interests.”
Financial institutions use arbitration clauses to take away consumers’ constitutional right to pursue a trial by jury or to join a class action lawsuit. Consumers with disputes are forced into private, closed-door arbitration proceedings that are not only inconvenient and costly, but are also ones in which consumers rarely prevail. Such clauses are typically non-negotiable, and companies frequently hide them in agreements that are lengthy and dense.
The Arbitration Fairness for Consumers Act bans these abusive practices. The Act amends Title X of the Consumer Financial Protection Act of 2010 to prohibit pre-dispute arbitration agreements and class-action waivers in contracts for consumer financial products or services. Under the Act, such agreements would be neither valid nor enforceable. A one-pager on the bill is available here. The bill text is available here.
In addition to Senator Van Hollen the legislation is cosponsored by U.S. Senators Brian Schatz (D-Hawaii), Raphael Warnock (D-Ga.), Elizabeth Warren (D-Mass.), Robert Menendez (D-N.J.), Dianne Feinstein (D-Calif.), Bernie Sanders (I-Vt.), Edward Markey (D-Mass.), Jack Reed (D-R.I.), Richard Blumenthal (D-Conn.), Alex Padilla (D-Calif.), Ron Wyden (D-Ore.), Sheldon Whitehouse (D-R.I.), Mazie Hirono (D-Hawaii), Amy Klobuchar (D-Minn.), Catherine Cortez Masto (D-Nev.), Dick Durbin (D-Ill.), Cory Booker (D-N.J.), Bob Casey (D-Pa.), Kirsten Gillibrand (D-N.Y.), and Ben Ray Luján (D-N.M.).
The legislation has been endorsed by the American Association for Justice, the National Consumer Law Center (on behalf of its low-income clients), Public Citizen, UnidosUS, US PIRG, Center for Responsible Lending, Consumer Federation of America, Americans for Financial Reform, and National Association of Consumer Advocates.
Next Article Previous Article