WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today praised the Consumer Financial Protection Bureau’s (CFPB) announcement that it will take action to protect consumers’ right to seek legal relief in disputes with financial services companies.
“Many Ohio consumers who have been wronged don’t realize that they’ve signed away their right to hold banks, credit card issuers, and other financial services companies accountable in court,” said Brown, ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. “The CFPB’s decision to address the unjust and harmful practice of forced arbitration is an important step toward leveling the playing field for consumers. I will keep urging the CFPB to take the strongest action possible to restore consumers’ right to hold corporations accountable.”
The CFPB issued a study in March that found that the rights of consumers nationwide are being limited by forced arbitration in the financial services industry.
In May, Brown joined more than 50 members of Congress in urging the CFPB to eliminate the use of forced arbitration clauses that are often buried in the fine print of checking accounts, private student loans, credit cards, and other contracts. These clauses prevent consumers from taking companies to court or participating in class action lawsuits when a dispute arises. The full text of the letter can be found here.
According to the CFPB, on average, 32 million Americans are eligible for financial relief each year but consumers who are subject to forced arbitration agreements often lose out on that money. The study also found that there is no evidence that companies that use forced arbitration agreements – and therefore avoid some litigation costs – lower prices or increase access to credit for consumers as a result. A fact sheet of the report can be found here.
Brown continues to fight for fair financial practices for consumers. He is a cosponsor of the Arbitration Fairness Act of 2015, which would make forced arbitration agreements unenforceable in the case of employment, consumer, antirust, or civil rights disputes.