Supreme Court Upholds Ruling Supporting California Consumers in Predatory Lending Class Action Against BofA

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predatory bank lending

The U.S. Supreme Court has declined to review a Ninth Circuit ruling reinstating a proposed consumer class action against Bank of America over its allegedly predatory lending activities. As reported by Law 360, the banking giant’s failed attempt to get the ruling reviewed leaves in place a Ninth Circuit panel ruling from earlier this year that reinstated a proposed consumer fraud class action brought against Bank of America NA by lead plaintiff Donald Lusnak, a California homeowner. According to Law 360, the suit “sought to force the North Carolina-based bank to comply with a California law requiring mortgage lenders to pay at least 2 percent interest on borrowers’ escrow accounts.” [Read more…]

New York Times Op-Ed: “Let Consumers Sue Companies”

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Scam Fraud Consumer Rights

A powerful op-ed published this week in the New York Times examines recent workings in the House and Senate to fundamentally undermine consumer rights in the United States. The Consumer Financial Protection Board recently created a new rule preventing companies from denying consumers the right to band together and go to court when they are treated unfairly. The rule would act to keep companies from restricting consumer recourse to binding, closed-door arbitration outside the courts and sidestepping the judicial system. [Read more…]

New CFPB Rule to Ban Companies From Using Arbitration Clauses to Block Class Action Lawsuits

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New CFPB Rule to Ban Companies From Using Arbitration Clauses to Block Class Action Lawsuits

The Consumer Financial Protection Bureau (CFPB) has issued a new rule that will prevent companies from including language in arbitration agreements that would keep consumers from filing class action lawsuits. While companies can still mandate arbitration (as opposed to individual lawsuits) to resolve consumer disputes, they can no longer force consumers to surrender their rights to bring collective group actions when the conduct complained of affects many consumers in a similar fashion. [Read more…]

New Measure That Will Reshape Class Action Lawsuits Under Senate Review

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New Measure That Will Reshape Class Action Lawsuits Under Senate Review

A new bill seeking to curb enforcement of U.S. class action lawsuits is facing opposition from antitrust groups, including the Committee to Support the Antitrust Laws (COSAL). The measure, H.R. 985 – Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, is currently under review by the Senate Judiciary Committee after being passed by the House on a 220-201 vote March 9. The bill would add preconditions for class actions and complex litigation cases. [Read more…]

Consumers Overwhelmingly Want Access to Legal System Currently Denied by Major Banks

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Bank Misconduct

A 2016 study by The Pew Charitable Trusts notes that consumer disputes with banks over fees and policies are on the rise. Of particular concern are mandatory arbitration clauses found in 90% of bank account agreements. These forced arbitration provisions steer consumers to third-party decision-makers whose decisions are usually binding, giving the consumer limited or no opportunity to appeal. Such provisions also prohibit consumer bank customers from seeking any remedy in an impartial court of law. [Read more…]

Forced Arbitration Steals Consumers’ Rights

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Forced Arbitration Steals Consumers’ Rights

Lieff Cabraser partner Mark P. Chalos has written an article for The Tennessean discussing the mandatory arbitration clauses hidden in an astonishing number of financial service and product contracts that ultimately deprive consumers of their basic constitutional rights to justice when something goes wrong. Chalos’ “Forced Arbitration Steals Consumers’ Rights” piece also signals a call to action for consumers to voice their opinions to federal and state legislators now, during open review of the Consumer Financial Protection Bureau’s (CFPB) newly proposed rules. [Read more…]

Elizabeth Cabraser Comments on New CFPB Proposal Regarding Arbitration Clauses

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Judge's Gavel

The federal Consumer Financial Protection Bureau (CFPB) proposed a potentially transformative new rule on Thursday regarding forced arbitration agreements that strip consumers of financial products of their basic constitutional rights. If approved, the proposed rule will bar financial institutions like banks and credit card companies from using forced arbitration clauses to prevent consumers from filing class action lawsuits. These clauses left consumers with no court options and locked them into unbalanced private arbitration to their widespread detriment. [Read more…]

New Rule from Consumer Financial Protection Bureau Would Restore Consumers’ Rights to Collective Action Against a Predatory Financial Industry

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Banks Get Boot from Forced Arbitration

If the new Rule is approved, banks will no longer be able to use forced arbitration clauses to ban consumers from joining together in class action lawsuits, seen as most effective consumer option in fighting illegal practices

After an extensive new study that conclusively proved how unfair and destructive fine print “forced arbitration” clauses have been for consumers, the Consumer Financial Protection Bureau (“CFPB”) has issued a new rule forbidding banks from forcing consumers into non-trial unbalanced arbitration hearings as their only recourse when a bank has cheated them. If approved, this landmark rule will be a huge gain for consumers, who have been suffering from bank schemes and illegal manipulations without any real means to fight back. [Read more…]

War on Consumer Protection: How the Enforcement of Consumer Laws Falls Under Attack

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War on Consumer Protection: How the Enforcement of Consumer Laws Falls Under Attack

As mandatory arbitration clauses become more prominent within company contracts, “attempts to protect businesses at the expense of consumers are underway,” according to an opinion piece by law professor Jeff Sovern published by USA Today. Consumer laws have historically been enforced in two ways – through the government and via lawmakers. [Read more…]

Hidden Arbitration Contract Clauses Restrain Consumers’ Constitutional Rights

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Hidden Arbitration Clauses Restrain Constitutional Rights

A specter is haunting consumer contracts. In the last few years, there has been a veritable explosion of forced arbitration clauses thrust into contracts in industries ranging from banking to insurance, medical to retirement care. GrubHub food delivery service just updated their user agreement to force their customers into mandatory arbitration over any disputes that might arise as a result of their using the service to get Chicken Masala or local pizza. This routine addition to many companies’ dealings with customers has resulted in the deprivation of consumers’ basic constitutional rights, as these forced arbitration agreements require individuals to give up certain fundamental legal protections, including the right to a fair court trial in front of a neutral judge.

[Read more…]

Unwanted Robocalls Hidden in Federal Budget Bill

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Unwanted Robocalls to Cellphones

The upcoming congressional budget bill includes a provision to amend the Federal Communications Act to allow the government to collect federal debts — such as federal student loans, mortgages, and taxes — through means that include the use of automated calls to consumers’ cellphones. [Read more…]

New York Times Editorial: Arbitrating Disputes, Denying Justice

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Arbitrating Disputes, Denying Justice

“In recent years, America’s corporations have created a private system for handling disputes that benefits them greatly while denying consumers their day in court.” So states the Editorial Board of The New York Times in a follow-up to their groundbreaking three-part expose on forced arbitration clauses shunting consumer disputes into often-unbalanced negotiation outside any court of law. [Read more…]