In a move intended to level the playing field between the American public and corporations with regard to contract disputes on financial products, the U.S. Consumer Financial Protection Bureau (CFPB) proposed new rules this month that would limit corporations’ ability to force citizens away from the court system and into mandatory arbitration. Proposed new rules by U.S. agencies like the CFPB trigger a statutory 90-day public comment period, and for these new rules that period began on May 24, 2016.
“Signing up for a credit card or opening a bank account can often mean signing away your right to take the company to court if things go wrong,” said CFPB Director Richard Cordray. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them. Our proposal seeks comment on whether to ban this contract gotcha that effectively denies groups of consumers the right to seek justice and relief for wrongdoing.”
The CFPB is an independent U.S. agency protecting consumers from fraud in the financial sector. The CFPB was created as part of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act following the financial crisis of 2007-2008 and the Great Recession.
About Lieff Cabraser and Consumer Protection
False advertising, bait and switch marketing, phony disclosure of manipulative bookkeeping devices, unconscionable pricing, and charging for services never provided are some of the many unfair and deceptive practices rogue corporations use to defraud consumers.
Lieff Cabraser advises consumers as well as businesses whether and how to pursue legal action to halt and obtain compensation for the deceptive practices of large corporations. With a blend of courage, superior legal skills, and high principles, we protect our clients’ interests and help them achieve their goals by winning highly-complex consumer protection lawsuits against those that have defrauded consumers.
We have successfully prosecuted scores of consumer class action lawsuits against many of the largest U.S. banks, financial service companies, and corporations. Working with co-counsel, we have achieved judgments and settlements in excess of $3 billion for consumers in these cases.
The public comment period on the CFPB’s new proposed rule changes against mandatory arbitration ends in August 2016.