For Immediate Release: July 14, 2009
Contact: Kerri Axelrod
202-965-3500, ext. 369
Consumer Financial Protection Agency Bill is Right to Address Forced Arbitration, Says Coalition
Today, the Senate Banking Committee will hear testimony on the proposed Consumer Financial Protection Agency. The following is a statement from David Arkush* of the Fair Arbitration Now Coalition regarding the House draft of the bill (H.R. 3126)
Washington, DC – “The new Consumer Financial Protection Agency should provide a critical check on the unscrupulous practices of the financial industry that have inflicted economic hardship on American families.
“We are encouraged that the House bill addresses forced arbitration. Ending this predatory practice in consumer financial contracts is critical to protecting consumers and restoring accountability in the financial marketplace.
“Forced arbitration clauses are hidden in the fine print of everyday consumer contracts from job applications and nursing home agreements to credit card billing inserts and mortgage loans. Corporations use these one-sided arbitration clauses as a shield to avoid accountability and a sword to hound consumers for debts they may not even owe.
“We look forward to working with members of Congress in the coming weeks to strengthen the House language and ensure that the legal rights of Americans are safeguarded against predatory financial corporations.”
The Fair Arbitration Now Coalition has over 70 members and supporters, representing consumers, employees, homeowners and franchise holders. The groups range from Public Citizen, the Leadership Conference on Civil Rights, the National Association of Consumer Advocates, the National Employment Lawyers Association and the American Association for Justice to Consumers Union and Consumer Federation of America.
Two other bills have been introduced that would stem the abusive practice of forced arbitration. The bipartisan Arbitration Fairness Act (S. 931 / H.R. 1020), sponsored by Sen. Russ Feingold (D-Wis.) and Rep. Hank Johnson (D-Ga.), would ensure that the decision to arbitrate is made voluntarily and after a dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers and employees. The bipartisan Fairness in Nursing Home Arbitration Act (S. 512 / H.R. 1237), introduced by Sens. Mel Martinez (R-Fla.) and Herb Kohl (D-Wis.) and Rep. Linda Sanchez (D-Calif.), would eliminate forced arbitration clauses in nursing home contracts.
* David Arkush is the Director of Public Citizen’s Congress Watch Division.
For more information, visit http://www.fairarbitrationnow.org/.