Today the Consumer Financial Protection Bureau (CFPB) announced a proposed rule that will limit the financial industry’s use of forced arbitration, a practice used to block consumers from enforcing their legal rights.
In response, Mike Calhoun, President of the Center for Responsible Lending (CRL), issued the following statement:
This proposed rule is another key development in bringing transparency and fairness to consumer finance. While it does not end all forced arbitration, it does return the opportunity for class actions to be heard and argued in a court of law.
By continuing to increase accountability, fairness, and transparency in the consumer financial market, CFPB is creating a lending climate that benefits everyone.
Additional CRL Resources
- CRL Comment on Forced Arbitration in College Federal Aid Applications – Submitted to the Department of Education, notes how this practice threatens to undermine the integrity of federal financial aid.
- Stacked Deck: A Statistical Analysis of Forced Arbitration - a statistical analysis of outcomes in forced arbitration, also called mandatory arbitration or binding mandatory arbitration
- Forced Arbitration Denies Consumers Fair Hearing - details some of the forces working against an individual's ability to receive a fair hearing during arbitration
For more information, or to arrange an interview with a CRL expert, please contact Charlene Crowell at charlene.crowell@responsiblelending.org or 919.313.8523