WASHINGTON, D.C. – After the release of a study by the U.S. Consumer Financial Protection Bureau (CFPB) that found that mandatory arbitration agreements negatively affect consumers’ ability to seek relief in disputes with financial companies, U.S. Sen. Sherrod Brown (D-OH) released the following statement:
“Consumers deserve the right to seek relief in court but many don’t know that they’re subject to mandatory arbitration,” said Brown. “Only when consumers are faced with a serious financial dispute do they realize that they are prohibited from filing individual and class action lawsuits, often depriving them of a fair settlement. The Consumer Financial Protection Bureau must protect consumer interests and implement a strong rule banning mandatory arbitration.”
Mandatory arbitration agreements allow either party to require that disputes be resolved outside of the court system, limiting consumers’ ability to sue individually or join class action lawsuits. According to the CFPB, on average, 32 million American are eligible for financial relief each year but consumers who are subject to mandatory arbitration agreements often lose out on that money. The study also found that there is no evidence that companies who use mandatory arbitration agreements – and therefore do not face class action lawsuits – 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 advocate for fair financial practices for consumers. Last Congress, Brown cosponsored the Arbitration Fairness Act of 2013, which would make mandatory arbitration agreements unenforceable in the case of employment, consumer, antirust, or civil rights disputes.