More than 100 U.S. Senators and Representatives are asking the Consumer Financial Protection Bureau (CFPB) to move ahead with its efforts to restore the right of consumers to join together to hold corporations accountable when they break the law. In separate House and Senate letters, the lawmakers voice their support for a CFPB proposal that would limit the financial industry’s use of forced arbitration “ripoff clauses,” typically buried in the fine print of take-it-or-leave-it contracts, to block consumers from challenging hidden fees, fraud, and other illegal behavior.
Forced arbitration “encourages unscrupulous business practices by allowing violations of the law to go unchecked,” the Senate letter, led by Senate Minority Leader Harry Reid (D-Nev.), Senators Al Franken (D-Minn.), Patrick Leahy (D-Vt.), and Sherrod Brown (D-Ohio), points out. Forced arbitration can cause damage to small businesses and law-abiding financial companies as well as to consumers, the letter adds. Its 38 signers “commend the CFPB for its comprehensive study and for carefully considering extensive public input before issuing its final proposal.”
The House letter, signed by 65 lawmakers and spearheaded by Representatives Maxine Waters (D-Calif.), Hank Johnson (D-Ga.), and John Conyers (D-Mich.), praises the CFPB rule as “a critical step to protect the public interest by ensuring that consumers receive redress for systemic unlawful conduct.”
These letters add to the broad support the CFPB’s proposed rule has already attracted. In April, 164 organizations representing consumers, students, civil rights, labor, small business, and more – led by AFR and Public Citizen – urged the CFPB to act on its Congressional authority to restrict forced arbitration in all the markets it oversees. The rule is open to public comment through August 22nd.