Earlier this month, the Consumer Financial Protection Bureau issued a new rule banning banks from forcing consumers to sign mandatory arbitration clauses. These types of clauses prohibit consumers from joining in class action suits in cases of fraud or predatory lending – lawsuits like the one that resulted in the $175m settlement from Wells Fargo in Baltimore in 2012.
The House GOP recently introduced a resolution to repeal the new CFPB rule under the 1996 Congressional Review Act in a vote that could come as early as this week. The National Consumer Law Center, a consumer legal advocacy group, urged supporters in an email to call Representatives Steny Hoyer (MD-5) and Dutch Ruppersberger (MD-2) and demand that they oppose the repeal of the ban on forced arbitration.
Yesterday, Indivisible Howard County and Indivisible Towson joined BMore Indivisible in signing on to a letter sent to Representative Ruppersberger’s office urging him to oppose the House GOP repeal effort:
The time, energy, and cost of individual arbitration prevent the vast majority of consumers from pursuing legal action when corporations — like big banks and credit card companies — violate their rights. Savvy corporations know that individual consumers are unlikely to pursue legal action over relatively small amounts of money. This is why so many corporations require arbitration and forbid class actions in their consumer contracts, and why the CFPB’s new rule is so necessary.
We hope that you will take a stand in favor of your constituents and against Wall Street, and use your vote to protect the right of average citizens to band together and access the courts when they have been the victims of financial wrongdoing.
Update (5:10PM, July 25): The House voted to repeal the CFPB ban on forced arbitration 231-190 on a party line vote, with all Democrats opposing the measure. We thank Representatives Ruppersberger, Sarbanes, and House Democrats for fighting to protect the rights of consumers against banks and other corporations.