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August 26, 2016<\/p>\n
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Contact:\u00a0NCL Communications, Cindy Hoang, cindyh@nclnet.org, (202) 207-2832<\/p>\n
Washington, DC\u2014The National Consumers League (NCL), the nation\u2019s pioneering consumer and worker advocacy organization, founded in 1899, joins comments by other consumer groups in support of a rule proposed by the Consumer Financial Protection Bureau (CFPB) to limit the use of forced arbitration clauses by banks, credit card companies, lenders, and other financial services. Nearly 13,000 comments<\/a> were filed with the CFPB on this important rule. NCL is a signatory to a letter signed by 281 consumer and labor groups<\/a> praising the CFPB\u2019s rule.<\/p>\n Sally Greenberg, NCL\u2019s executive director, stated: “This rule will finally help to even the playing field and work to curb the worst abuses in the financial services marketplace.\u00a0While we would like to see additional reforms to help restore consumer rights, promote transparency, and improve the market, we see this as a significant step forward in efforts to curb industry practices and make consumer financial markets fairer and safer.\u201d<\/p>\n The Dodd-Frank Act required the CFPB to study the use of arbitration provisions, and the bureau produced a\u00a0lengthy report in March 2015\u00a0to lay out the basis for its curbs. Based on the report, the CFPB unveiled its proposed rule to prohibit companies from putting forced arbitration clauses in new contracts that block consumer participation in class action lawsuits in May.<\/p>\n While the proposed rule does not bar all uses of forced arbitration, as NCL had hoped, the rule will make a meaningful difference in consumer transactions moving forward. NCL has long advocated against companies\u2019 use of arbitration clauses, which are often found hidden deep in the fine print of consumer contracts and user agreements.<\/p>\n Forced arbitration clauses eliminate the rights of consumers to go to court over future disputes that they may have with the company. Instead of having the right to bring cases to a court of law before an impartial judge paid by taxpayers and have a case heard on a public record, consumers have to go before an arbitrator\u2013who is often chosen from a list created by the company.\u00a0The company can keep choosing that arbitrator for repeat business, so there\u2019s an incentive for the arbitrator to favor the company.\u00a0This arbitrator is not required to follow established law or procedure.\u00a0The arbitrator’s decisions cannot be appealed, and are often kept secret.<\/p>\n \u201cThese clauses are found in nearly every conceivable consumer contract, including those for credit cards, bank accounts, mobile homes, nursing homes, wireless cell phone carriers, physicians\u2019 offices, and many others,\u201d said Greenberg.<\/p>\n The Federal Arbitration Act, a statute enacted in 1925, was designed so that businesses could elect to settle their own disputes out of court if they wished to do so. \u201cIt was never intended to be used to deprive consumers of their rights. Unfortunately, a conservative Supreme Court, often decided by a close 5-4 vote, has approved business\u2019 use of these clauses in consumer contracts,\u201d said Greenberg. \u201cThe law has been converted into a weapon against consumers to force them to \u2018agree\u2019 to give up their rights.\u201d<\/p>\n ###<\/p>\n About the National Consumers League<\/strong><\/p>\n The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.<\/p>\n","protected":false},"excerpt":{"rendered":" August 26, 2016 Contact:\u00a0NCL Communications, Cindy Hoang, cindyh@nclnet.org, (202) 207-2832 Washington, DC\u2014The National Consumers League (NCL), the nation\u2019s pioneering consumer and worker advocacy organization, founded in 1899, joins comments by […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"0","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false},"categories":[25],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/posts\/1184"}],"collection":[{"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/comments?post=1184"}],"version-history":[{"count":3,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/posts\/1184\/revisions"}],"predecessor-version":[{"id":9991,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/posts\/1184\/revisions\/9991"}],"wp:attachment":[{"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/media?parent=1184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/categories?post=1184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nclnet.org\/wp-json\/wp\/v2\/tags?post=1184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}