May 18, 2016
House Panel Defends Corporations That Want to Keep Using Fine Print to Escape Accountability
Statement of Sonia Gill, Counsel for Public Citizen’s Congress Watch Division
Note: Today, the U.S. House of Representatives Subcommittee on Financial Institutions and Consumer Credit will hold a hearing to consider whether the U.S. Consumer Financial Protection Bureau’s (CFPB) proposed rule (PDF) to limit the financial industry’s use of forced arbitration is in the public interest and protects consumers.
Today, we expect the majority of House panelists and the lawmakers who invited them to be firmly on the side of corporate lawbreakers who want to continue hiding forced arbitration clauses in the fine print of contracts, cheating customers and denying them access to courts.
While the Consumer Financial Protection Bureau’s proposal does not end forced arbitration entirely, it restores the customer’s right to join class actions to hold corporations accountable when they break the law. Class actions are a vital consumer protection enforcement tool, and any congressional or industry interference with the CFPB’s rulemaking would be extremely damaging to U.S. consumers.
Last month, a diverse coalition of 164 consumer, civil rights, labor and community groups sent the CFPB a letter arguing that its proposal is a crucial measure needed to hold big banks and other financial institutions accountable when they break the law, and that the agency should go much further. The CFPB should ban forced arbitration outright.
Rather than address the merits of the CFPB’s arbitration study (PDF) or the specifics of the proposed rule, House lawmakers are choosing to wage the industry’s war on consumers. It is shameful that these members are siding with big banks instead of their own constituents.