BREAKING - CFPB Proposes Landmark Consumer Protection Rule
Today, the Consumer Financial Protection Bureau (CFPB), the agency created in the aftermath of the 2008 financial collapse, announced a landmark proposal to curb widespread fraud and abuse on Wall Street by restricting the use of forced arbitration against consumers.
Forced arbitration clauses are buried in the fine print of most customer contracts for financial products, such as bank account, credit card, and loan agreements. This unjust practice allows financial institutions to prohibit Americans from joining together as a class if the bank cheats them out of their money. Financial institutions use forced arbitration clauses because they know that in such cases, individual consumers are unlikely to have the resources to fight back, and that class actions are one of the only ways people can assert important rights guaranteed by consumer protection laws.
“Forced arbitration allows Wall Street to evade vital consumer protection laws designed to ensure that even the most powerful financial institutions follow the rules,” AAJ President Larry Tawwater said in a statement. “The financial security of American families depends on a level playing field where they can hold Wall Street accountable if they are cheated out of their hard-earned money. But forced arbitration gives big corporations a license to steal by preventing cheated customers from banding together as a class to hold that corporation accountable. Instead, consumers are funneled into a rigged proceeding where they will have to face the bank – and its vast financial resources – alone.”
Hopefully, that’s about to change. The CFPB’s proposed rule would restore consumers’ ability to bring class actions when Wall Street engages in systemic wrongdoing at their expense.
Nearly every major national news outlet reported on the CFPB’s announcement this morning, with stories running in the New York Times, the Wall Street Journal, the LA Times, the Washington Post, the Associated Press, and Reuters.
While the rule proposed by the CFPB would significantly benefit Americans who fall victim to large scale Wall Street schemes, scams, and frauds, consumers with individual claims will still be forced into this rigged, secretive forum.
“The CFPB’s proposal to restore the right of Americans to join together to hold Wall Street accountable is a significant step forward,” Tawwater said. “But we urge the Bureau to establish a strong final rule that restores the right of all Americans, including those seeking justice on an individual basis, to choose whether and how to enforce their rights."
You can tell the CFPB to restore your right to hold Wall Street Accountable! Click here to submit a comment urging the CFPB to protect consumers’ rights.