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WAKE UP! CFPB, Congress and Activists to Bring Arbitration Out of Fine Print and Into Spotlight

WAKE UP! CFPB, Congress and Activists to Bring Arbitration Out of Fine Print and Into Spotlight

By Paul Bland, Senior Attorney

On Twitter!! @PblandBland

One of the biggest reSen. Frankenasons that corporations have been so successful in stripping people of important constitutional rights through forced arbitration is that most Americans never read the fine print of their contracts.  Americans are largely unaware that a huge number of corporations take away key rights from their customers, workers, investors and patients.  And what Americans don’t know, in this instance, really hurts them.  Crucial consumer protection, civil rights, investor protection and other laws are increasingly gutted by forced arbitration clauses.

A trio of developments in the next week may wake a lot of people up, though.  Arbitration might be about to make a leap from Corporate America’s Most Successful Dirty Secret to a National Scandal.  Corporate America may not know what’s about to hit it.  Because Something is Happening Here, and You Don’t Know What It Is, Do You, Mr. Chamber of Commerce?

First, the Consumer Financial Protection Bureau (CFPB) is going to hold a field hearing on forced arbitration at 11 a.m. CST, Thursday, December 12, in Dallas, Texas.  The event will feature remarks from CFPB Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public. The CFPB has the power to ban forced arbitration clauses for all lending and financial transactions within its jurisdiction. The agency has been studying forced arbitration for nearly two years now, and is in a position to know a ton about how badly it has been abused by lenders.  I have offered extensive comments to the CFPB in the summer of 2012 and again this summer in connection with its study of this issue.  The CFPB field hearing should focus a bright spotlight on this problem.

Second, the Senate Committee on the Judiciary has scheduled a hearing entitled “The Federal Arbitration Act and Access to Justice: Will Recent Supreme Court Decisions Undermine the Rights of Consumers, Workers, and Small Businesses?” for 2 p.m. Tuesday, December 17, in Room 226 of the Dirksen Senate Office Building.  Senator Al Franken, one of our country’s most thoughtful and articulate spokespersons about access to justice, consumer protection and civil rights will preside over the hearing.  Witnesses will address how corporations have used forced arbitration to cheat members of the armed services of important legal protections against predatory lending targeting their families at home when they are fighting overseas, and to let huge corporations cheat many thousands of small businesses.

Finally, there is a new way for regular citizens to stand up for their rights.  There is a new petition before Change.org petition calling on the CFPB to revoke banks’ license to steal by banning forced arbitration. There already have a few thousand signatures, and I hope that YOU WILL ADD YOUR NAME TO THE LIST.

Among other things, in the United States right now, abuses of forced arbitration are being used every day to:Franken Bland

  • let bad employers pay men more than women for the same work;
  • let predatory lenders violate basic federal and state consumer protection laws;
  • let the hugest corporations in the U.S. ignore the antitrust laws;
  • let dishonest for-profit schools lie to prospective students  about what the schools so that the students will incur mountains of debt in exchange for nothing;
  • let the worst nursing homes in the country mistreat vulnerable patients.

Part of the reason that this happens is that huge corporations have seized the rights of tens of millions of Americans, taking advantage of Supreme Court decisions that prioritize forced arbitration over nearly every other law. 

But part of the reason that corporations have been able to steal our rights is that way too few of us have realized that we need to pay attention to hold onto them.  After a week like this coming one, maybe that will start to change.