WASHINGTON, D.C. —Today, U.S. Sen. Al Franken (D-Minn.), along with Rep. Hank Johnson (D-Ga.), led a broad coalition of more than 50 members of Congress in the fight to protect the rights of consumers in Minnesota and across the country who are being hurt by forced arbitration contracts in the financial services industry.
In a letter to the Consumer Financial Protection Bureau (CFPB)—the top consumer agency in the country—the lawmakers called on the CFPB to swiftly issue new rules that will eliminate the use of forced arbitration clauses in consumer financial service contracts—things like credit cards, checking accounts, payday loans, private student loans, and cell phone contracts. Forced arbitration clauses often prevent everyday consumers from taking companies to court for legal relief, and instead put victims of wrongdoing at a disadvantage.
“These clauses force individuals into private binding arbitration as a condition of buying a product or service, and are designed to stack the deck against consumers and ensure that the final outcome of forced arbitration is unreviewable by courts,” wrote the lawmakers. “Forced arbitration clauses—often buried deep within the fine print of financial products and service contracts—harm American consumers by depriving them of their day in court even when companies have violated the law.”
In March, the CFPB released a study showing that forced arbitration agreements have prevented consumers from finding relief when they are wronged. Since then, Sen. Franken and his colleagues have been banging the drum for new rules to outlaw these unfair consumer contracts. More than 100 groups have also called on the CFPB to issue new rules.
Sen. Franken was joined on his letter by Sens. Patrick Leahy (D-Vt.), Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Dick Durbin (D-Ill.), Ron Wyden (D-Ore.), Bernard Sanders (I-Vt.), Jack Reed (D-R.I.), Robert Menendez (D-N.J.), Sheldon Whitehouse (D-R.I.), .Tom Udall (D-N. Mex.), Jeff Merkley (D-Ore.), Tammy Baldwin (D-Wis.), Mazie Hirono (D-Hawaii), Elizabeth Warren (D-Mass.), Heidi Heitkamp (D-N. Dak.), and Ed Markey (D-Mass.). In the House of Representatives, 41 members of Congress signed the letter.
As a strong advocate for consumers and workers in cases of forced arbitration, Sen. Franken has long been fighting to ban these type of contracts. He recently reintroduced his comprehensive legislation with Rep. Johnson—called the Arbitration Fairness Act—to restore the rights of consumers, workers, and small businesses to seek justice through the courts. Sen. Franken has also previously introduced legislation to ban mandatory arbitration clauses in cell phone and mobile data service contracts and in college enrollment contracts.
You can read a copy of the lawmakers’ letter to the CFPB here or below.