FRA Opposes Financial Institutions Forced Arbitration
FRA signed onto The Military Coalition (TMC) letter of support for the Consumer Financial Protection Bureau’s (CFPB) final rule on arbitration agreements. The proposed rule addresses the widespread harm of forced arbitration by preserving the ability of service members and consumers banding together to seek relief through the civil justice system when financial institutions have broken the law.
Forced arbitration is a system wherein service members’ claims against a corporation are funneled into a rigged, secretive system in which all the rules, including the choice of the arbitrator, are picked by the corporation. Forced arbitration clauses include a provision banning the rights of consumers to ban together to hold a corporation accountable.
Our service members protect our nation against both foreign and domestic threats. The sacrifices they and their families make in order to serve are compelling reasons alone to ensure they are not only shielded from predatory financial practices and unscrupulous lenders, but are also able to use our civil justice system if and when violations arise.
In related news the House recently passed the “Financial CHOICE Act” (H.R.10), which seeks to dramatically reshape the regulation of banking and other financial activities. This legislation includes a number of provisions weakening the CFPB and its Office of Service Members Affairs.
The bill now goes to the Senate for further consideration. Members can use the FRA Action Center located on our website to ask their Senators to oppose this legislation.