On April 27, The Institute joined 163 groups that advocate for consumers, students, civil rights, labor, small businesses, and others in a letter urging the Consumer Financial Protection Bureau (CFPB) to use its Congressional authority to limit forced arbitration clauses in certain financial products.
In forced arbitration, consumers lose the right to present a grievance to an impartial judge and jury. Instead, big banks and abusive lenders are able to hire a private firm of their choosing to decide the dispute, leaving consumers with little opportunity to present evidence or appeal a bad decision. Many ripoff clauses even bar consumers from talking about what happened to them — which means that the public will likely never learn about the corporate wrongdoing.
The letter comes in the wake of the CFPB’s announcement that it will be holding a field hearing in New Mexico on May 5 where it is expected to propose a rule regarding forced arbitration clauses that fall under its authority.