WAKE UP! CFPB, Congress and Activists to Bring Arbitration Out of Fine Print and Into Spotlight

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    By Paul Bland, Senior Attorney

    On Twitter!! @PblandBland

    One of the biggest reSen. Frankenasons that corporations have been so successful in stripping people of important constitutional rights through forced arbitration is that most Americans never read the fine print of their contracts.  Americans are largely unaware that a huge number of corporations take away key rights from their customers, workers, investors and patients.  And what Americans don’t know, in this instance, really hurts them.  Crucial consumer protection, civil rights, investor protection and other laws are increasingly gutted by forced arbitration clauses.

    A trio of developments in the next week may wake a lot of people up, though.  Arbitration might be about to make a leap from Corporate America’s Most Successful Dirty Secret to a National Scandal.  Corporate America may not know what’s about to hit it.  Because Something is Happening Here, and You Don’t Know What It Is, Do You, Mr. Chamber of Commerce?

    First, the Consumer Financial Protection Bureau (CFPB) is going to hold a field hearing on forced arbitration at 11 a.m. CST, Thursday, December 12, in Dallas, Texas.  The event will feature remarks from CFPB Director Richard Cordray, as well as testimony from consumer groups, industry representatives, and members of the public. The CFPB has the power to ban forced arbitration clauses for all lending and financial transactions within its jurisdiction. The agency has been studying forced arbitration for nearly two years now, and is in a position to know a ton about how badly it has been abused by lenders.  I have offered extensive comments to the CFPB in the summer of 2012 and again this summer in connection with its study of this issue.  The CFPB field hearing should focus a bright spotlight on this problem.

    Second, the Senate Committee on the Judiciary has scheduled a hearing entitled “The Federal Arbitration Act and Access to Justice: Will Recent Supreme Court Decisions Undermine the Rights of Consumers, Workers, and Small Businesses?” for 2 p.m. Tuesday, December 17, in Room 226 of the Dirksen Senate Office Building.  Senator Al Franken, one of our country’s most thoughtful and articulate spokespersons about access to justice, consumer protection and civil rights will preside over the hearing.  Witnesses will address how corporations have used forced arbitration to cheat members of the armed services of important legal protections against predatory lending targeting their families at home when they are fighting overseas, and to let huge corporations cheat many thousands of small businesses.

    Finally, there is a new way for regular citizens to stand up for their rights.  There is a new petition before Change.org petition calling on the CFPB to revoke banks' license to steal by banning forced arbitration. There already have a few thousand signatures, and I hope that YOU WILL ADD YOUR NAME TO THE LIST.

    Among other things, in the United States right now, abuses of forced arbitration are being used every day to:Franken Bland

    • let bad employers pay men more than women for the same work;
    • let predatory lenders violate basic federal and state consumer protection laws;
    • let the hugest corporations in the U.S. ignore the antitrust laws;
    • let dishonest for-profit schools lie to prospective students  about what the schools so that the students will incur mountains of debt in exchange for nothing;
    • let the worst nursing homes in the country mistreat vulnerable patients.

    Part of the reason that this happens is that huge corporations have seized the rights of tens of millions of Americans, taking advantage of Supreme Court decisions that prioritize forced arbitration over nearly every other law. 

    But part of the reason that corporations have been able to steal our rights is that way too few of us have realized that we need to pay attention to hold onto them.  After a week like this coming one, maybe that will start to change.

    Comments

    Allow class action

    When a group of citzens have a common complaint against a company, that group should be able to sue the company in one class action and retain the right to a jury trial as written in Amendmant VII.

    Your last post lamented a

    Your last post lamented a recent circuit court decision enforcing an arb clause so as to gut workers' rights under the NLRA. It seems to me that this is at least as important as any of the three items mentioned here in terms of potential to galvanize opposition to forced arbitration clauses, since it so directly threatens all of organized labor. Consumer lawyers need to get out of our silos and work with unions, which are firmly established, independently funded, and more oriented to policy advocacy and collective action than any existing consumer advocacy group.

    As a consumer lawyer I know

    As a consumer lawyer I know many of my clients never read the fine print in contracts, and other consumer agreements. Even judges have admitted that when purchasing cars or homes they fail to read the entire document. Through forced arbitration big business wins just another way of taking our rights as citizens of this great nation away from each of us.

    Consumers being forced to arbitrate disputes.

    This is wrong. It allows money and power to corrupt justice. What is a true cruel joke is the rationalization that courts offer in order to sustain forced arbitration, that is: "The consumer agreed to it in the fine print and that makes it not 'unconscionable'". That is ludicrous. It is the Judiciary "manufacturing" a fictitious consent that did not truly ever exist.

    It falls under the heading of "C'Mon Man!". if you are going to deny the right to jury trial (which I'm strongly opposed to), then deny it, but quit lying about it! You are making a mockery of American justice when you lie like that.

    Forced arbitration is unfair

    Forced arbitration is unfair - please take appropriate steps to make sure consumers do not keep falling prey to it.

    Hisorical quotes in support of the right to trial by jury

    "The civil jury trial is preferable to any other and ought to be held sacred." -- Virginia Declaration of Rights, 1776

    "In civil suits the parties have a right to trial by jury and this method of procedure shall be held sacred." -- Massachusetts Constitution, 1780

    "Trial by jury in civil causes,... trial by jury in criminal causes, [and] the benefits of the writ of habeas corpus... all stand on the same footing; they are the common rights of Americans." -- Richard Henry Lee

    "I consider [trial by jury] as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." -- Thomas Jefferson to Thomas Paine

    "By a declaration of rights I mean one which shall stipulate freedom of religion, freedom of the press, trial by juries in all cases..." -- Thomas Jefferson to Alexander Donald

    "The civil jury is a valuable safeguard to liberty." -- Alexander Hamilton

    "In suits at common law, trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." -- James Madison

    "In suits between man and man, the ancient trial by jury is one of the greatest securities to the rights of the people." -- Virginia Bill of Rights, 1788

    And finishing with this commentary by a contemporary jurist in the "conservative" camp: "The founders of our nation considered the right of trial by jury in civil cases an important bulwark against tyranny and corruption, a 'safeguard too prescious to be left to the whim of the sovereign.'" -- Chief Justice William Rehnquist, 1979

    "The civil jury trial is preferable to any other and ought to be held sacred." -- Virginia Declaration of Rights, 1776

    "In civil suits the parties have a right to trial by jury and this method of procedure shall be held sacred." -- Massachusetts Constitution, 1780

    "Trial by jury in civil causes,... trial by jury in criminal causes, [and] the benefits of the writ of habeas corpus... all stand on the same footing; they are the common rights of Americans." -- Richard Henry Lee

    "I consider [trial by jury] as the only anchor ever yet imagined by man, by which a government can be held to the principles of its constitution." -- Thomas Jefferson to Thomas Paine

    "By a declaration of rights I mean one which shall stipulate freedom of religion, freedom of the press, trial by juries in all cases..." -- Thomas Jefferson to Alexander Donald

    "The civil jury is a valuable safeguard to liberty." -- Alexander Hamilton

    "In suits at common law, trial by jury in civil cases is as essential to secure the liberty of the people as any one of the pre-existent rights of nature." -- James Madison

    "In suits between man and man, the ancient trial by jury is one of the greatest securities to the rights of the people." -- Virginia Bill of Rights, 1788

    And finishing with this commentary by a contemporary jurist in the "conservative" camp: "The founders of our nation considered the right of trial by jury in civil cases an important bulwark against tyranny and corruption, a 'safeguard too prescious to be left to the whim of the sovereign.'" -- Chief Justice William Rehnquist, 1979

    (Historical quotes of the day compiled by "7th Amendment Advocates")