Inching Toward Fair Arbitration
Arbitration, the private dispute resolution system where companies essentially get to pick the judges who have total power to make binding decisions, just got a little more consumer friendly.
We are now one step closer to a lending system that restores consumers’ access to the civil justice system. Forced arbitration clauses are all around us in the form of credit card contracts, nursing home contracts, employment contracts, and more. Click here to learn more about the issue and sign a petition in support of Fair Arbitration Now.
Here are the nuts and bolts. The recently passed financial reform bill (also called the Dodd-Frank Act) bans forced arbitration in mortgages. It also gives the new Consumer Financial Protection Bureau authority to restrict or prohibit forced arbitration clauses in consumer financial product and service contracts, following a CFPB study of the issue. Finally, the law provides that the SEC may prohibit or impose conditions or limitations on forced arbitration agreements between broker-dealers and their clients if the SEC finds it “in the public interest and for the protection of investors.”
The Arbitration Fairness Act is moving along as well, and should be voted on by the full House Judiciary Committee this fall. If passed, the Arbitration Fairness Act of 2009 (HR 1020) would end the predatory practice of forcing workers and consumers to sign over their rights by making pre-dispute binding mandatory arbitration (“forced arbitration”) clauses unenforceable.
Click here to follow AT&T Mobility LLC v. Vincent and Liza Concepcion, an arbitration case unfolding in the Supreme Court.