Your Right To Sue

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Earlier this month the Consumer Financial Protection Bureau issued a rule cracking down on the use of mandatory arbitration clauses in financial services contracts. In plain English, the ruling prevented banks from putting “you can’t sue us” language into their contracts. Banks and other service providers tend to prefer to settle disputes with consumer through “arbitrators” rather than the legal system because it keep costs down.

CFPB director Richard Cordray summarized the rule as follows:

Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong… our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together.

Congress is considering a resolution to overturn the rule under the Congressional Review Act (H.J. Res 111 & S.J.Res 47)

Why this matters

Part of the CFPB’s report was a study in how disputes turned out when they were arbitrated or litigated. Lawsuits put more than $1,000,000,000 back into the pockets of 34,000,000 consumers whereas arbitration delivered just $360,000 to 78 people. Arbitration is not just less expensive as a process for large financial institutions; it’s more likely to decide in their favor by four or five orders of magnitude.

Proponents of the CFPB’s rule (and therefore opponents of the Congressional rollback of it) argue that banks continue to hold too much power after the 2008 financial crisis and that consumers and their savings are inadequately protected from Wall Street gamesmanship of the sort that brought down the banking system nearly a decade ago.

Opponents of the CFPB’s rule (and therefore supporters of the Congressional repeal) call the ruling “anti-consumer” and claim that it stifles choice and innovation in the marketplace.

Tell Congress what you think!

Text RESIST to 50409 to tell your representatives or Senators what you think about this or any other issue before Congress.

Who To Talk To

The House has already passed its joint resolution so the issue is now before the Senate. While you can write to any of your Senators on this topic, the resolution is presently before the Senate Committee on Banking, Housing, and Urban Affairs so the following Senators are particularly important to the resolutions’ future. Senators up for reelection in 2018 are indicated with an asterisk (*).

In addition, the following Republican senators have yet to overtly support the measure. They are likely the most important votes in the Senate as a whole.

Your Right To Sue

Why this matters

Tell Congress what you think!

Who To Talk To

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