For immediate release
U.S. Senate Votes to Take Away Americans' Right to Sue Financial Institutions
The U.S. Senate tonight voted (50--50, tie broken by Vice-President Mike Pence) to approve a Congressional Review Act resolution that repeals a rule on predispute binding mandatory (forced) arbitration issued by the Consumer Financial Protection Bureau (CFPB). The rule, issued in July 2017, had restored consumers’ right to band together in class actions to pursue claims of wrongdoing against financial institutions.
Below is the statement of Christine Hines, Legislative Director, National Association of Consumer Advocates:
At a time that has revealed the consequences of reckless conduct, fraud, and lack of accountability as demonstrated in the Equifax and Wells Fargo scandals, the U.S. Senate voted to sacrifice their constituents’ legal rights and satisfy the demands of big banks and predatory lenders.
The CFPB rule issued in July limited the use of forced arbitration clauses in consumer financial contracts and restored American consumers’ right to band together in court when financial institutions cheat, deceive, or defraud them. The rule was issued after a three-year long thorough examination of the practice in the finance sector. The study concluded that forced arbitration clauses are prevalent in the consumer finance sector and that they block harmed consumers from going to court to seek remedies.
With their use of forced arbitration, bad corporate actors in the marketplace profit off of predatory and illegal conduct because there is little to hold them accountable. The U.S. Senate's vote gives wrongdoers a free pass to continue to act badly, risking the financial wellbeing of tens of millions of people.