July 11, 2017
For Immediate Release:
Contact: Christine Hines, email@example.com, (202) 452-1989, ext. 109
Statement of Christine Hines, Legislative Director, National Association of Consumer Advocates
Sen. Tom Cotton (R-Ark.) appears to be intent on depriving American consumers of critical choices when they face big banks and predatory lenders. The senator reportedly plans to file a Congressional Review Act (CRA) resolution that would nullify a final rule that restores consumers’ right to access the court system when they are wronged by bad actors in the financial marketplace.
The rule issued yesterday by the Consumer Financial Protection Bureau would once again empower ordinary people to band together in court against Wall Street to fight illegal charges, fees, and rip-offs. But Sen. Cotton seems content with retaining the predatory practice of forced arbitration, where corporations use their nonnegotiable fine print to deprive working families of their constitutional right (7th amendment!) to go to court and force them to resolve disputes against bad actors that rip them off in costly secretive individual arbitration.
Forced arbitration is a rigged system that favors powerful corporations because it is essentially run by them. They select the arbitration firms and arbitration decisions are rarely appealable, no matter how unfair they are. Meanwhile, the marketplace already has public, accessible court systems for sophisticated and non-sophisticated parties to more fairly resolve disputes.
Consumers should have the freedom to choose to go to arbitration or court after a dispute arises, but their constitutional liberty has been taken away in the corporate fine print. And it is costly. Wells Fargo, for example, has fought tooth-and-nail to deprive its customers of their day in court to avoid being held accountable for wrongdoing that has harmed consumers and the marketplace.
Unfortunately, Sen. Cotton seems to be just fine with that. His colleagues in the Senate should reject his proposal and should instead celebrate the rule that restores their constituents’ rights.