AFR Statement: AFR Applauds Resolution of Class-Action Lawsuit Against Wells Fargo
Public Citizen and Americans for Financial Reform Applaud Resolution of Class-Action Lawsuit Against Wells Fargo, Push for Strong Federal Rules to Restore Class-Action Rights
FOR IMMEDIATE RELEASE
March 29, 2017
Public Citizen and Americans for Financial Reform applaud the announcement of a proposed $110 million settlement for consumers harmed by the bank’s fraudulent account scheme in multiple class-action lawsuits against Wells Fargo. This agreement in principle comes after Wells Fargo faced months of concerted pressure from activists and lawmakers to drop its use of forced arbitration to block defrauded consumers from suing the bank in court.
In addition to hindering consumer recovery, reports suggest that Wells Fargo invoked these “rip-off clauses” as early as 2013 to keep the scandal out of the public eye. The Consumer Financial Protection Bureau (CFPB) is expected to finalize a rule in the coming months that would restore consumers’ ability to join together in class-action lawsuits and return transparency to arbitration by tracking claims and outcomes.
“This settlement is good news for consumers, but we need the CFPB rule to keep banks and lenders from using forced arbitration to hide their lawbreaking in other cases,” said Lisa Donner, Executive Director for Americans for Financial Reform. “We need an end to the forced arbitration ‘get out of jail free card’ for banks.”
The announcement also comes just weeks after the House passed H.R. 985, which would effectively kill class-action lawsuits that return over $500 million directly to defrauded consumers every year according to the CFPB.
“This announcement shows why class action rights are so necessary to our civil justice system,” said Lisa Gilbert, Vice President of Legislative Affairs for Public Citizen. “Since most consumers simply give up when forced into arbitration, these rip-off clauses give banks a license to steal without consequence.”
Tags: arbitration, CFPB, Wells Fargo