I am one of those who lost more than 90% of my savings and investments to Wall Street cons in 2008-2010. And I am an educated ethical hard working middle class engineer who worked by backside off just to be able to buy a decent condo in SF after nearly twenty five years of struggle. I paid my taxes and played by the rules. I have two Masters and a PhD. I moved out of Cal for a job. We sold our condo and moved to the Midwest, though it was culturally and professionally very difficult for my wife. She made that sacrifice for me and for us (as we were newly married). Then we moved again to Florida for a job and some security. And just as we were settling down the cons at Wall Street stole everything from me. I am a proud America who played by the rules, paid my taxes and did everything by the book. I am the kind of guy who'd walk two miles to pay my 20 cents fine on a public library book. Imagine what this country did to me and my wife. Yet we mustered on, as my wife tried to start her mental health practice so she could help the community, us and my declining health. And then Florida gave my wife a second degree facial burn. Yes a second degree facial burn, at a simple spa where she had gone for a $ 50 facial for her birthday. Her whole life, career, her professional investments, etc...just got killed. She use to complain about the US, now I hate my country for all its Political thugs and Wall Street scums. Wall Street cons and scums should go to jail, and hand our money back.
10
"No one, no matter how big or how powerful, should escape accountability if they break the law."
Amen!
We have moved a LOOOONG way from this in the US. Time to start moving back.
Amen!
We have moved a LOOOONG way from this in the US. Time to start moving back.
4
Ironic, isn't it?
"Free enterprise" is supposed to empower consumers by offering more choices and lower costs.
The business-bribed GOP uses that term as a weapon -- turning it into meaning something very anti-consumer: Government must ignore abusive business practices -- no matter how abusive. The GOP is not so much a political party as a business (and religion/gun) lobby -- held together by corporate and Dark Money.
"Free enterprise" is supposed to empower consumers by offering more choices and lower costs.
The business-bribed GOP uses that term as a weapon -- turning it into meaning something very anti-consumer: Government must ignore abusive business practices -- no matter how abusive. The GOP is not so much a political party as a business (and religion/gun) lobby -- held together by corporate and Dark Money.
1
I have not watched "Game of Thrones" but imagine the fantasy world of royalty, court intrigue, serfs and peasants suffering would be too close to our current culture for my comfort.
1
When it comes to financial thievery in all forms there really needs to be punishment that befits the crime. To allow already wealthy, intelligent, well educated people to constantly abuse their positions and take advantage of less educated people that can't fight back is one of the main reasons people feel the system is broken. White collar criminals should be thrown into the general population of the prisons they help create and profit from in some instances at the very least. Optimally we would take the Chinese approach to corruption, when enforced, a brief trial and lengthy prison sentence or merely shot. There is no fairness in our society, it's easy to understand the despair in the inner cities and rural communities. I'm just surprised the whole thing hasn't gotten really ugly, yet.
2
Unfortunately the oligarchs do not believe in fair dealing. They and their dependents (teaparty/GOP office holders) don't want anything to cut into their profits (and campaign donations). So the electorate should suffer not the rich money-suckers.
4
So Hensarling and the Chamber want the federal government to protect the right of Wall Street and corporations to steal from Americans without consequences. And this apparently has support from the GOP. Bill after bill, rule after rule, the GOP is solidifying the hold corporations have on government and their power over ordinary citizens. Elections will soon be irrelevant, and the corporations will be able to control everything we do.
8
I have often wondered if there is not some constitutional guard against a private company forcing one to sigh away one's rights to access his nation's pubic legal system. If even one business can do it then they all can do it and there is no free market choice wherein to find an alternative. How is it that this basic citizen's right is not protected by law?
2
Just remember, the good guy is Richard Cordray, director of the Consumer Financial Protection Bureau. Hensarling and the Chamber of Commerce are the bad guys. At bottom, it's really that simple.
Has anyone else been forced into arbitration? We all know that more attorneys wind up involved than if it were a regular lawsuit.
I represented an elderly relative who'd been unscrupulously ripped-off by a broker at one of the major firms--a broker who'd ripped off a number of other elderly folks. I wasn't allowed to bring anyone with me to the arbitration proceeding, not even someone to take notes for me.
The brokerage firm brought their branch manager, an attorney, a second attorney (a surprise to me, but explained as being there to get training). Every single person on the arbitration panel was from the industry.
I got back all the money...after 8 years of squabbling and threats from the brokerage house's attorneys, but not a penny of interest. When I complained, someone at the stock exchange acknowledged that the head of that arbitration panel had gotten too many complaints for being biased towards the profession and was no longer on their panels. But...too late for me.
Arbitration is the last place I'd ever expect to get fair treatment. Companies, banks, brokerage firms, etc should have no ability to make people sign away their legal right to sue.
You may ask why we signed originally. Try opening any kind of relationship with a bank, etc without signing away your rights.
Has anyone else been forced into arbitration? We all know that more attorneys wind up involved than if it were a regular lawsuit.
I represented an elderly relative who'd been unscrupulously ripped-off by a broker at one of the major firms--a broker who'd ripped off a number of other elderly folks. I wasn't allowed to bring anyone with me to the arbitration proceeding, not even someone to take notes for me.
The brokerage firm brought their branch manager, an attorney, a second attorney (a surprise to me, but explained as being there to get training). Every single person on the arbitration panel was from the industry.
I got back all the money...after 8 years of squabbling and threats from the brokerage house's attorneys, but not a penny of interest. When I complained, someone at the stock exchange acknowledged that the head of that arbitration panel had gotten too many complaints for being biased towards the profession and was no longer on their panels. But...too late for me.
Arbitration is the last place I'd ever expect to get fair treatment. Companies, banks, brokerage firms, etc should have no ability to make people sign away their legal right to sue.
You may ask why we signed originally. Try opening any kind of relationship with a bank, etc without signing away your rights.
11
Your unfortunate experience in the arbitration process doesn't mean all is meant to be solved by one means only.
No, it just means that we shouldn't all be forced to sign an arbitration clause every time we open a bank account, sign a contract with an architect, open a brokerage account, or whatever. We shouldn't be coerced into giving up our right to class action.
5
NYT Superb article...a comprehensive and illuminating reformist expose of consumer protection policy in America and the sinister ideological and "legalese" driven interference against its just implementation.
The Consumer Financial Bureau director Mr Cordray concisely states its purpose....."A cherished tenet of our justice system is that no one,no matter how big or powerful,should escape accountability if they break the law".
The Trump administration (and Republican) reasoning as concluded by Mr Hensarling of Texas...."In the last election,the American people voted to drain the DC swamp of capricious,unaccountable bureaucrats,who wish to control their lives "..................The NYT should conduct a straw poll to see how Americans see this issue (after the election of Don the Con) and if they have changed or learned how to think!
The Consumer Financial Bureau director Mr Cordray concisely states its purpose....."A cherished tenet of our justice system is that no one,no matter how big or powerful,should escape accountability if they break the law".
The Trump administration (and Republican) reasoning as concluded by Mr Hensarling of Texas...."In the last election,the American people voted to drain the DC swamp of capricious,unaccountable bureaucrats,who wish to control their lives "..................The NYT should conduct a straw poll to see how Americans see this issue (after the election of Don the Con) and if they have changed or learned how to think!
9
Allowing class action suits is Absolutely necessary to protect consumers from the small scale fraud practiced routinely by large corporations. It's a get out of jail free card and corporations know it. Kudos to Mr. Cordura for bravely protecting the little guy. Trump's true colors are shown by opposition to this move. Thanks NY times for your valuable reporting on the true effects of mandatory arbitration.
6
As a member of the social justice action group of a church, I heard Richard Cordray speak with passion about this agency and its mission. I have seen the courageous stand that he (and Sen. Warren) have shown with providing real consumer assistance. I have experienced fast responsible action from the companies about whom I've complained on the CFPB website. No wonder the public is behind the agency and his leadership. If we had more like him, maybe frustrated voters would have avoided harikari in Trump.
And, don't forget, it was authorized by President Obama.
Fear of oligarchies was discussed by many of our Founding Fathers, Presidents T Roosevelt and F Roosevelt, Eisenhower. Hurrah for Richard Cordray.
And, don't forget, it was authorized by President Obama.
Fear of oligarchies was discussed by many of our Founding Fathers, Presidents T Roosevelt and F Roosevelt, Eisenhower. Hurrah for Richard Cordray.
7
One might assume, based on his efforts to gut Dodd-Frank, that Mr. Hensarling has no problem filling his campaign coffers.
6
The arbitrator is paid by the corporation. Then they judge your case in secret. And if you discuss it in public, the corporation can take you to court. What a sweet deal!
I bought new car recently. The contracts had arbitration clauses. I told stealer to cross them out or I walk. The stealer crossed them out.
I bought new car recently. The contracts had arbitration clauses. I told stealer to cross them out or I walk. The stealer crossed them out.
8
Most commenters miss the central point. Our country needs a just, economical, and speedy process for resolving conflicts for breach of contract as well as torts.
As they currently operate, neither the courts nor arbitration satisfy these elementary criteria.
The lawyer monopoly and the expense of resolution through any legal process (except sometimes small claims court) prevent just and economical outcomes.
A "justice" system that operates primarily for the entire legal apparatus of clerks, courts, judges, administrators, stenographers, video stenographers, etc. fails.
All commenters here who believe that a lawsuit will provide consumers an effective recourse knows little about how lawsuits are conducted.
As they currently operate, neither the courts nor arbitration satisfy these elementary criteria.
The lawyer monopoly and the expense of resolution through any legal process (except sometimes small claims court) prevent just and economical outcomes.
A "justice" system that operates primarily for the entire legal apparatus of clerks, courts, judges, administrators, stenographers, video stenographers, etc. fails.
All commenters here who believe that a lawsuit will provide consumers an effective recourse knows little about how lawsuits are conducted.
6
The rule change, or any rule change for that matter, isn't authored with perceived lawyer monopolies in mind. Nor are rule changes made to initiate economic outcomes but to address grievance to such outcomes. Historically, the class action ability has led to numerous resolutions affecting not only disregard of economic outcomes, but health and societal well-being. Perhaps not perfect, but if comparison benchmarks needed, check the legal recourse for the public in China or Russia.
2
Hooray for the CFPB, although I strongly doubt the rule will be allowed to stand. The GOP has ZERO interest in assisting or looking out for the little guy. They ONLY serve the oligarchs.
5
This item referenced in Your Daily Briefing only mentions what it will cost Wall Street. No mention of the benefits to customers. Not balanced at all.
4
Use your common sense. If arbitration caused the tables to tilt in favor of the customer, do you think it would be in these contracts? I've always questioned how giving up your ability to seek redress from the courts before there was actually any harm/loss could be legal.
14
Arbitration is preferred by the banks because it is faster and less expensive than the courts, and because (unlike court proceedings) it is not public. Those features are also attractive to individual complainants, who want matters handled as quickly and inexpensively as possible, with no public reporting of their financial matters.
Two words: class actions.
Further, the implication that challenging extra charges contained in fine print of form "agreements" requires disclosure of the challengers' net worth etc is bogus.
Further, the implication that challenging extra charges contained in fine print of form "agreements" requires disclosure of the challengers' net worth etc is bogus.
4
don't agree, arbitration serves some complainants but primarily serves the defendants as they channel the business to selected arbitrators and their companies. Functions similar to insurance defense doctors.
2
Money talks. Big Money talks loudly.
As has been said, 'The race is not always to the swift nor the battle to the strong, but that's the way to bet.' Attributed to sportswriter Hugh E. Keough. Damon Runyon "borrowed" it...
As has been said, 'The race is not always to the swift nor the battle to the strong, but that's the way to bet.' Attributed to sportswriter Hugh E. Keough. Damon Runyon "borrowed" it...
Well past time for the American people to take back their rights from the rapacious corporations who have enslaved them. This new rule must stand. I hope the public truly kicks up a fuss if Congress tries to obstruct this.
4
The arguments here in favor of destroying this rule could be used to shut down the whole civil justice system, excluding everybody from his/her day in court and giving the Banks and Corporate America a free pass! "Everyman is entitled to his day in Court....except when the defendant is a Corporation or a bank. People should resist this assault on thier basic rights and preserve these precious rights. When the chamber of commerce, the Big banks and people like Jeb Hensarling rave on about how good this is for you, waathc out, he as a bridge to sell you!
1
Who today reads all of the fine print before we click 'Accept'?
Therein lays part of the problem.
Therein lays part of the problem.
3
The bigger question is why there should be all that fine print in the first place. All of the fine print just sets out the way that the lender has ascendancy over the lendee. The CFPB has done great work in ensuring that the major 'gotchas' from the fine print are now declared in bold print along with the real cost to the consumer in various scenarios. This rule puts the 'big boys' on notice that they can't skate around the rules and do damage to their customers without public consequences.
6
It doesn't matter if you read it and understand it when you have no power to negotiate. Try telling Citibank you don't agree to their arbitration clause but would still like that credit card. See what happens. Disclosure is not the problem.
5
This is not about consumer protection, but Cordray job protection, case for which currently at appeals court level, therefore inevitably headed to the Supreme Court, who, presumably, will formalize the finality of this Obama lackey's long overdue marching orders for everyone to see.
Which means all his rulings in the interim period, the stuff of fluff, DOA, and when not, doomed to be stymied unabashedly by Congress, hook or crook. Sorry.
Now, if Mr. Cordray really wants to make a comeback, I suggest he reinvent himself as Mr. Nice Guy version 2.0, which he can do instantly by circulating a proposal to rename the CFPB to GFPB.
Yes, Google and Facebook Protection Bureau. Like? Thank you NYT EB. I knew you would.
Which means all his rulings in the interim period, the stuff of fluff, DOA, and when not, doomed to be stymied unabashedly by Congress, hook or crook. Sorry.
Now, if Mr. Cordray really wants to make a comeback, I suggest he reinvent himself as Mr. Nice Guy version 2.0, which he can do instantly by circulating a proposal to rename the CFPB to GFPB.
Yes, Google and Facebook Protection Bureau. Like? Thank you NYT EB. I knew you would.
1
It was Reagan who said "Trust, but Verify." The consumer is of any product must know the risks before buying that product. Otherwise, you are a sucker. I agree that arbitration is bad. But buying without knowledge is worse.
1
And relying on (even thinking that) courts and lawyers will promote economical justice--or a fair interpretation and application of contract language) calls for a rich and distorted hopefulness.
It's up to us to make our voices heard. You can be sure the banks have got their lobbyists buttonholing OUR representatives right now. The burden is on us to take action. If we don't speak up then don't be surprised when our representatives listen to the lobbyists instead.
Write to your representatives. Let them know that you want them to act on OUR behalf.
I have 5 letters going out tomorrow, to Oregon's 2 senators and to my district representative. I'm cc'ing Richard Cordray and the White House.
Paper letters, sent through the USPS, get much more attention than emails and online petitions.
Write! It's only a democracy if we speak up.
Write to your representatives. Let them know that you want them to act on OUR behalf.
I have 5 letters going out tomorrow, to Oregon's 2 senators and to my district representative. I'm cc'ing Richard Cordray and the White House.
Paper letters, sent through the USPS, get much more attention than emails and online petitions.
Write! It's only a democracy if we speak up.
2
Banks might not get to keep the billions they've scammed from credit card customers? Cry me a river.
9
Said Representative Jeb Hensarling, the Texas Republican who has been leading the charge to weaken the agency. “In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives.”
Talk about capricious and unaccountable bureaucrats!!! Look in the bloody mirror!
Don't tell me whom I can marry!
Get out of my bedroom!
Stop editing what my doctor can say to advise me!
Stop interfering with my doctor's recommendations for care!
Stop making safe medical procedures illegal!
Stop excoriating my healthcare!
Stop allowing corporations to pollute the air and water!
Talk about capricious and unaccountable bureaucrats!!! Look in the bloody mirror!
Don't tell me whom I can marry!
Get out of my bedroom!
Stop editing what my doctor can say to advise me!
Stop interfering with my doctor's recommendations for care!
Stop making safe medical procedures illegal!
Stop excoriating my healthcare!
Stop allowing corporations to pollute the air and water!
6
I am sure millions of the supporters of Trump and Republicans are the ones bing screwd by arbitration. Espcially those who are defualting or being rovercharged by banks. Again and again we see the blindness of these people, letting personal biases control their lives instead of trying to maintain it and being smart. The Pied Piper leads them on.
1
“In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives.”
-------
Tha'tts not the swamp I understood them to want to drain. I thought it was the swamp of corruption.
-------
Tha'tts not the swamp I understood them to want to drain. I thought it was the swamp of corruption.
5
Here's why you should not be concerned over "losses on Wall Street" as a result of this new consumer protection:
One of the biggest problems with our economy is that Wall Street has been taking (stealing) an outsized proportion of our GDP for decades. They do this with hidden charges like credit card transaction costs and fees. That proportion of our money going into the pockets of Wall St. fat cats keeps growing and growing. Other sectors of the economy (including consumer spending which is based on the available spending money in consumer pockets) are slowly diminished and limited in their ability to grow because of Wall Street's greed and because of their increasing ownership of our politicians. This has all been enabled via the ever-softening campaign finance laws that Republicans and their shills -- Gorsuch, Alito, Thomas, Roberts and Kennedy -- have conspired to impose on our once-great nation. When you vote Republican, you are voting in favor of corporations writing the laws of our nation to take more profit at the expense of your personal wealth, your security, your human rights, and your democracy.
One of the biggest problems with our economy is that Wall Street has been taking (stealing) an outsized proportion of our GDP for decades. They do this with hidden charges like credit card transaction costs and fees. That proportion of our money going into the pockets of Wall St. fat cats keeps growing and growing. Other sectors of the economy (including consumer spending which is based on the available spending money in consumer pockets) are slowly diminished and limited in their ability to grow because of Wall Street's greed and because of their increasing ownership of our politicians. This has all been enabled via the ever-softening campaign finance laws that Republicans and their shills -- Gorsuch, Alito, Thomas, Roberts and Kennedy -- have conspired to impose on our once-great nation. When you vote Republican, you are voting in favor of corporations writing the laws of our nation to take more profit at the expense of your personal wealth, your security, your human rights, and your democracy.
6
Love the headline on the front page. I just cry myself to sleep every night thinking about the amount of money those poor companies stand to lose.
I'm even a shareholder in the Big Casino, and I say, stick it to them. Couldn't happen to a nicer bunch.
I'm even a shareholder in the Big Casino, and I say, stick it to them. Couldn't happen to a nicer bunch.
2
It's about dang time.
2
“In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives.”
Right! The American people voted to get rid of unaccountable beaurcrats who might level the playing field and give the little guy a chance against large financial institutions.
Right! The American people voted to get rid of unaccountable beaurcrats who might level the playing field and give the little guy a chance against large financial institutions.
1
Oh Dick Cordray. You've fought, and are fighting the good fight. But look at you. You're killing yourself fighting against overwhelming odds: A criminal, treasonous Congress, and a lying President who wishes nothing more than to send the country into a death spiral, an isolated old country that has ceded the world stage to oligarchs.
Come back to Ohio where we love you and will care for you. Win the Governorship and undo the illegal gerrymandering that the last Governor and his cohorts in State and Treasury put through to elect 14 of 18 Congressional seats.
We'll be behind you to begin to restore our national honor and the American Dream.
Come home Dick.
Come back to Ohio where we love you and will care for you. Win the Governorship and undo the illegal gerrymandering that the last Governor and his cohorts in State and Treasury put through to elect 14 of 18 Congressional seats.
We'll be behind you to begin to restore our national honor and the American Dream.
Come home Dick.
3
The Republican Party - always looking to screw the common man in the interest of billionaires and big business.
Why lower or middle income Americans vote for the GOP is and will always remain a mystery to me.
Why lower or middle income Americans vote for the GOP is and will always remain a mystery to me.
4
The fact that this one-sided system has received any degree of legal blessing at all indicates that there is not blind justice standing with her eyes covered by a cloth, but that the system, which previously allowed everyone equal standing in front of a judge, has signed away their rights. With no possibility of lining out the offensive and one-sided process, the citizen has had his her previously assumed right snatched away. This is high time to strike for fairness, and if there is a move we should make, I hope the Times will keep this in front of the American people to hound their representatives to allow this rule to stand.
I wonder how much the representative who is leading this tirade is getting paid, or how much he enjoys being in Washington? I would hope that at next election the damage he has done to the people is pointed out.
I wonder how much the representative who is leading this tirade is getting paid, or how much he enjoys being in Washington? I would hope that at next election the damage he has done to the people is pointed out.
2
Mandatory arbitration clauses permit some businesses to cheat hundreds of thousands of customers out of amounts too small to fool around with but quite large in aggregate benefit to the business. The truly sad thing is that the Scalia court went way way out of its way to bless such contracts even if the face of contrary state and local law. There you have it. Not all government intervention is bad; only intervention that helps screw the little guys like Trump voters.
3
Hope it goes through as this would only be fair to the lemming clients.
"Wall St. Could Lose Billions if U.S. Ends Forced Arbitration."
So be it.
So be it.
3
This is only about transferring money to lawyers, the worst possible outcome.
1
It's s about hitting corporations where it hurts and exposing their fraudulent practices to the light of day. Yup that might take some lawyers getting paid for their work and their risk financing these class action suits.
Good. I hope they lose billions. Billions that they stole from the American people. I dont want some bank account in Zurich to have a few extra zeros. Id rather have the average Joe have an extra $100.
2
Top 5 canpaign contributors 2016 for Jeb Hensarling:
JP Morgan
Bank of America
Goldman Sachs
American Bankers Association
Ernst & Young
Source:opensecrets
JP Morgan
Bank of America
Goldman Sachs
American Bankers Association
Ernst & Young
Source:opensecrets
4
It's really quite simple. Republicans like Jeb Hensarling (which is the overwhelming majority of Republicans) don't represent citizens; they represent corporations. And corporations will not be satisfied with anything less than complete and unfettered power to control Americans' lives. The Republicans and their corporate masters want the American people hogtied and with their neck under the boot of the corporations. The more money that dishonest and cheating corporations can gouge out of consumers, the more money they will have to give to their lackeys in congress who then create laws that give corporations ever more power. That's how it works. That is why, until Citizens United is reversed with a constitutional amendment banning all private and corporate donations to politicians - which is just legalized bribery, after all - democracy in the United States will continue to exist in name and in theory only.
3
If, and I say this with sure reservation it is not even a 50-50 chance, the actual people of the nation including the rural republicans, hear the reality of this rule, the R's in Charge will have a hard time blocking it or assailing the CFPB's independence.
This could be yet ANOTHER TrumpCare situation that locks up the R's and lets their voters eat them alive.
Old folks hate being cheated by credit card companies and everyone in the rural parts of this nation despises "big banks" whom they seem to think are Jewish conspiracy to destroy America.
This could be yet ANOTHER TrumpCare situation that locks up the R's and lets their voters eat them alive.
Old folks hate being cheated by credit card companies and everyone in the rural parts of this nation despises "big banks" whom they seem to think are Jewish conspiracy to destroy America.
1
Why not just change the regs to give the consumer(s) the right to choose between arbitration and a class action suite?
Here's a surefire way to dodge those class action lawsuits: DON'T RIP PEOPLE OFF!
The short online headline is "Wall Street could lose billions if US ends forced arbitration."
Why not "Consumers could recover billions..." or "Victims of unfair practices could recover billions..."?
Really--what's important to the NYT editors? Which readers are they looking to serve?
Why not "Consumers could recover billions..." or "Victims of unfair practices could recover billions..."?
Really--what's important to the NYT editors? Which readers are they looking to serve?
Laudably the new rule would leave any two parties to AGREE to arbitration in lieu of litigation. So, the evil in the current practice is to allow a whole class of 'contracting parties' to insist on arbitration through the fine print of, for instance, your credit card 'contract.'
Let's hope this rule survives the hue and cry of the Chambers of Commerce in Congress.
Let's hope this rule survives the hue and cry of the Chambers of Commerce in Congress.
1
All it's going to take for this rule to fail is the soft rustle of cash across a table.
Arbitration puts a capital "C" on the growth of Crony Capitalism in America which denies each person his 'day in court.' Will the American people never see through the huckster's spiel advanced by the GOP always for the sole benefit of the wealthy and powerful?
Arbitration should always be voluntary on the part of the plaintiff and NEVER be allowed as part of an employment (or purchase) contract, especially for cases involving amounts below. say, $500K.
This "parallel" judicial system is a cancer on our democracy.
This "parallel" judicial system is a cancer on our democracy.
1
The only people who get any significant financial gains from a class action lawsuit are the plaintiff's lawyers who file the lawsuit.
You want to limit arbitration clauses in consumer contracts with banks and other financial institutions? OK, fine! Then limit the attorney's fees to 10% or less. Let's see how Democrats like that idea!
Republican hypocrisy? How about Democrats being in cahoots with the trial lawyers? Hypocrisy is a two-edged sword...
You want to limit arbitration clauses in consumer contracts with banks and other financial institutions? OK, fine! Then limit the attorney's fees to 10% or less. Let's see how Democrats like that idea!
Republican hypocrisy? How about Democrats being in cahoots with the trial lawyers? Hypocrisy is a two-edged sword...
The Republican party and its members are all fraudsters, 99.99 % no less. Why Republican voters are voting for them and very loyal. Ha ha!
Key to this is the communist's playbook: Control the TV, media, Cable news, radio...all the cheapest information sources. The poor all goes for the cheapest information...ha ha as it turns out: NOT really cheap at all. Ignorance is more expensive than "intelligence" and knowledge!
You want to control a country? Control and fool, and indoctrinate the poor ha ha They are the biggest crowd in any place. Republican leaders and the banks, Wall street knew this.
Key to this is the communist's playbook: Control the TV, media, Cable news, radio...all the cheapest information sources. The poor all goes for the cheapest information...ha ha as it turns out: NOT really cheap at all. Ignorance is more expensive than "intelligence" and knowledge!
You want to control a country? Control and fool, and indoctrinate the poor ha ha They are the biggest crowd in any place. Republican leaders and the banks, Wall street knew this.
No worries, the Republicans will kill off this agency once and for all, too many rules people, we are here to make money, not treat people correctly
Whose side is NYTimes on---- Wall Street or the everyday people?
If they are on the people's side than they should change the article's title. Instead of "Wall Street Stands to Lose Billions..." it should read " The American People Stand to GAIN Billions..."
If they are on the people's side than they should change the article's title. Instead of "Wall Street Stands to Lose Billions..." it should read " The American People Stand to GAIN Billions..."
1
Republicans will kill this, then spin a lie that they were doing so to help the little guy (they same way they lie about Obamacare and their own health plan).
When will middle America wake up to GOP lies?
When will middle America wake up to GOP lies?
1
"... a coalition of credit card companies used an arcane federal law dating to 1925 that formalized arbitration as a way for companies of equal bargaining power to resolve corporate disputes."
Could one of you repubs please explain to me how I have bargaining power equal to any corporation? Anyone? Speak up, don't be bashful... What? No one's willing to try? Yeah, I thought so.
Could one of you repubs please explain to me how I have bargaining power equal to any corporation? Anyone? Speak up, don't be bashful... What? No one's willing to try? Yeah, I thought so.
1
Shame on the New York Times. You report that this rule "could cost the institutions billions of dollars." That's one way of looking at it. Another way is that the status quo costs consumers billions of dollars. Why not report it that way?
2
How about flipping that headline to instead read: "Consumers could save billions of hard-earned money if U.S. ends Wall Street's forced and unfair arbitration."
3
Whew. After all this Russia-Trump, finally some good news today!!
1
Hate the front page headline ("Wall Street Could Lose Billions if U.S. Ends Forced Arbitration"), hate the slant of sentences like "The action, by the Consumer Financial Protection Bureau, would deal a serious blow to banks and other financial firms" and just generally hate the politicized slant of the reporting here. Instead of "Wall Street Could Lose Billions", how about "Consumers Could Have Their Rights to Address Grievances in Court" as a headline?
I appreciate the balance of the article on the whole, but the lede is such that those who only read the headline and a few paragraphs likely come away thinking that somehow this move is a bad thing.
I appreciate the balance of the article on the whole, but the lede is such that those who only read the headline and a few paragraphs likely come away thinking that somehow this move is a bad thing.
1
Another example of egregious overreach by Cordray. While Trump had not had the gumption to fire him, I truly hope he is not reappointed when his term ends in 2018. This ruling will simply benefit the Trial Lawyers and lead to frivolous lawsuits against the banking industry. Rep. Hensarling is correct: Cordray is the most unaccountable bureaucrat in the Washington swamp.
War is peace. Freedom is slavery. Ignorance is strength. Mandatory arbitration is justice.
1
A step forward for us little guys. Level the playing field if you will. Good on the Board.
So there's a rule that keeps me from exercising my right to sue an organization that has wronged me and according to Rep. Hensarling's worldview, doing away with that restriction would somehow limit my freedom. Hypocrisy has finally reached its event horizon when restriction of rights is said to EQUAL liberty.
The arbiters are ALWAYS industry insiders. Consumers do NOT stand a chance of getting justice in a rigged system!!
1
"Wall Street" is not going to lose billions.
That number though is interesting, it seems they are making billions by not paying people what they should have to with the arbitration scam fraud ponzi scheme what ever you'd like to label it. The arbitration scam is criminal in its conception, intention, and in how it was carried out.
I saw we not only end it we claw back the false profits it gave the people who took advantage of it.
That number though is interesting, it seems they are making billions by not paying people what they should have to with the arbitration scam fraud ponzi scheme what ever you'd like to label it. The arbitration scam is criminal in its conception, intention, and in how it was carried out.
I saw we not only end it we claw back the false profits it gave the people who took advantage of it.
If both Wall Street and Texas Republicans are for it, I'm against it. I think that holds universally.
2
"Wall St. Could Lose Billions if U.S. Ends Forced Arbitration"
About time.
About time.
Cheers Mr. Cordray!
Wall Street will lose billions? Cry me a river. How many billions have consumers been bilked of by Wall Street and all the other big corporations out there?
3
Cordray for President!
2
Who picks and pays the arbiters the financial institutions do. If a bank feels that an arbiter most frequently finds for the consumer it will change to a group that reaches findings to their benefit. People deserve their day in court and that should not be circumvented.
1
Why stop at financial contracts? If you buy a consumer durable you have to agree to arbitration and the amounts involved are frequently greater than the ones discussed here. I bought a double oven from Whirlpool (who make most of them under an umbrella of brands). There was a well known design flaw I discovered. I had taken out a five year extended warranty. When I tried to invoke it Whirlpool refused to honor it and I found that arbitration, in Michigan! with their arbitrators was the only redress offered.
Oh great! another attempt by the trial bar to fuel a plethora of lawsuits. Arbitration has worked magnificently to reduce the incredible costs that so many products bear due to litigation expense.
1
Does Republican hypocrisy have no bound? Arbitration is great; mandatory binding arbitration (the sort this rule would affect) is abusive to the very people Trump purports to protect. This is not a regulation that would burden, but rather one of those that will aid us "little people " - the 99%. I find it incomprehensible that Trump supporters are blind to his true nature. He doesn't exactly hide it. How can they not differentiate between what he says and what he does?
If you doubt the value of regulation, check out images of Birmingham, Alabama from the early 1970's compared to now. Check out images of the Cuyahoga River on fire in the late 1960's and early 1970's. The Clean Air Act and the Clean Water Act - please don't forget what the regulations in those and other environmental protection acts have done for us. My students don't even know these Acts exist - this is how embedded they are in our culture. Do we really want to go backwards on financial and environmental protection?
If you doubt the value of regulation, check out images of Birmingham, Alabama from the early 1970's compared to now. Check out images of the Cuyahoga River on fire in the late 1960's and early 1970's. The Clean Air Act and the Clean Water Act - please don't forget what the regulations in those and other environmental protection acts have done for us. My students don't even know these Acts exist - this is how embedded they are in our culture. Do we really want to go backwards on financial and environmental protection?
4
The decision on this by Congress will confirm if their interest lies with their constituents or Big Money. This exception to a lawsuit is another way the 1% has found to take advantage of the consumer. Congressional votes on this, as well as the elimination of the Citizens Protection Bureau will make it clear if your congressional senators and House reps are on your side or theirs.
10
Under arbitration the individual can at least be heard and perhaps gain some satisfaction. Under class action the banks / companies /cooperatives get a slap on the wrist, the consumer gets coffee money and the lawyers buy new Porsche 911s .
Dairy farmers have been through this and that is how it works.
Dairy farmers have been through this and that is how it works.
4
Until banks and other financial institutions stop acting brazenly, and often like felons who could be convicted, consumers will need the tools to challenge them on a massive scale. Class actions do this. Scale is necessary because it can build mass and momentum in reigning them in. Left to their own devices, many banks, other lenders, and providers of other financial services believe that the role of marketing and sales practices is to steal and trick people. Nonetheless, class actions involve a lot of moving parts and outrageous fees for too many law firms, who view this kind of case as their trough. They get piggy, but do often get compensation for clients. Though that is a pittance, class action settlements are often enough to reign in the abusive practices. The best solution of all is to make criminal prosecutions that send the executive-level of the miscreants to federal prison.
4
Hensarling, that piece of crap, is using Republican fake-speak to spin the CFPB's efforts against forced arbitration as the government telling you how to run your life! What idiot would possibly believe that BS?
.
If you can't see through the smoke screen then it's probably you who is on fire. Wake up to the fact that Republicans care only about the rich and their party.
.
If you can't see through the smoke screen then it's probably you who is on fire. Wake up to the fact that Republicans care only about the rich and their party.
4
Go figure. It's the same group who are telling Americans they should have the "freedom" to run around with no health insurance.
1
THESE are the types of battles the Democrats should be waging. If they could take 5 minutes and pull themselves away from identity politics and the environment, they would win back all the middle class voters they lost in 2016.
I doubt they have the courage or wisdom to do so.
I doubt they have the courage or wisdom to do so.
4
Why are the behemoth corporations fearful of individuals being able to protect their rights fairly in court against them? Why shouldn't consumers have the same rights as the largest corporations in the world? Why do these corporations fear individuals banding together to protect their rights against unfair business practices, illegal actions and thefts against them, i.e. Wells Fargo? They can write off their losses. We can't.
Conversely, why don't our federally elected officials protect our rights as well as they protect the rights of these huge corporations, who have inappropriately and/or illegally impaired the rights of individuals?
The answer is that these Congressmen/women and Senators are larded with and have been bought off with political contributions to do so. Their alleged principles for doing so are just an excuse so that they can become millionaires and have job security for the rest of their lives. They never come home and live in the DC area for the rest of their lives. And if they lose their elections, they just take jobs down on K Street. They could care less about the protection of our rights for the 99% of us.
Conversely, why don't our federally elected officials protect our rights as well as they protect the rights of these huge corporations, who have inappropriately and/or illegally impaired the rights of individuals?
The answer is that these Congressmen/women and Senators are larded with and have been bought off with political contributions to do so. Their alleged principles for doing so are just an excuse so that they can become millionaires and have job security for the rest of their lives. They never come home and live in the DC area for the rest of their lives. And if they lose their elections, they just take jobs down on K Street. They could care less about the protection of our rights for the 99% of us.
15
While I am not exactly fan of arbitration, I realize that this "solution" is a wolf in sheep's clothing. The so-called class actions benefit no actual consumers, just plaintiff lawyers, who reap all the benefits of this proposal, while purportedly injured consumers get crumbs, at most.
3
We know financial institutions exploit their customers. Look at Wells Fargo for example. Don't you think the possibility of being sued might force a change in behavior?
1
But maybe part of the class action settlement will contain sanctions to have said corporation to stop eating us alive so quickly...
There is a very simple, highly efficient method for financial firms to avoid the feared costly legislation: stop conning customers.
Not being dependent on misleading customers will vastly reduce litigation risk.
Or is honesty just too hard a business model now?
Not being dependent on misleading customers will vastly reduce litigation risk.
Or is honesty just too hard a business model now?
23
Before the Consumer Financial Protection Bureau falls victim to the onslaught of the Trump administration, which is hell bent on doing away with the financial regulations, it has done a sterling job of deciding against the forced arbitration to allow the class suit action against the big financial market sharks.
8
This is perhaps the most important rule ever proposed to rein in the excesses of Wall Street. If you hit them hard in the pocket book, they will be less likely to participate in the billions of dollars in frauds Wall Street regularly perpetrated against investors. It is interesting to see how vehemently Congressman Jeb Hensarling is fighting against this vital consumer protection. I wonder how much money he has taken from Wall Street interests. Sounds to me like he is bought and paid for
21
Yep. check out Congressman Hensarling's top donors (all bankers and corps):
https://www.opensecrets.org/politicians/contrib.php?cycle=Career&cid...
https://www.opensecrets.org/politicians/contrib.php?cycle=Career&cid...
1
The headline is biased against consumers and misleading. It directs attention at the loss for Wall Street rather than at the gain for customers.
20
No. Consumers will save billions if Wall Street is no longer allowed to steal money with impunity.
25
I am against arbitration of any kind. Thank you.
7
This new rule will be a significant win for consumers, assuming that Republicans don't manage to scuttle it.
15
Gee, I wonder who's buttering Jeb Hensarling's bread. Swamp maintenance is a delicate operation, best left to those with vast experience.
8
This should have said “Wall Street will CONTINUE to STEAL billions and be immune from legal and financial consequences for their crimes...”
: ) L
: ) L
13
"The rule “should be thoroughly rejected by Congress under the Congressional Review Act,” said Representative Jeb Hensarling, the Texas Republican who has been leading the charge to weaken the agency. “In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives.”
Chutzpah of the day award to Jeb Hensarling.
Chutzpah of the day award to Jeb Hensarling.
15
Hooray!
Now we can be fleeced by lawyers instead of by bankers!
Shakespeare was right.
Now we can be fleeced by lawyers instead of by bankers!
Shakespeare was right.
7
Go figure, the additional accounts Wells Fargo Bank opened without their customer's permission or knowledge came with arbitration clauses.
Perhaps they need to accept the new rules without a fight as part of their penance.
Perhaps they need to accept the new rules without a fight as part of their penance.
11
The banking system has served its penance in every possible way since the financial crisis. Obviously PAN wants to pile on more penance against the banks. Once again the largest financial institutions will be able to handle this. But it will potentially impose huge legal and insurance costs on the community banks, who had nothing to do with the financial crisis. It is an outrageous overreach by the Elizabeth Warren created CFPB.
I only referred to Wells Fargo Bank - a nationwide community bank. Obviously Ed wants banks, big and small, to avoid any punishment or cost for wrong doing against their less-wealthy customers who cannot afford to fight for their rights alone.
1
Banking system has served its penance? Did I miss something? Did any bankers serve time for committing accounting fraud?
1
Involuntary arbitration is controlled injustice.
5
The headline "Wall St. Could Lose Billions if U.S. Ends Forced Arbitration" encapsulates the truth about our nation of swindlers and what it means to be a "successful" financial institution. Arbitration allows robbery with impunity and billions in free money for the wealthiest and most powerful.
No way the Republicans will let this rule stand, being such perversely predictable henchmen for their royal highnesses. They'll get away with too, and get re-elected by virtue of their excellent lying skills and their astonishing financial backers.
No way the Republicans will let this rule stand, being such perversely predictable henchmen for their royal highnesses. They'll get away with too, and get re-elected by virtue of their excellent lying skills and their astonishing financial backers.
19
I wish you would be more specific in your reporting and include the actual rule or bill number or something so I can easily look it up to do more research. Many of the articles never state the bill number of the issue you're reporting.
11
Perhaps this and other news articles condense somewhat to save space for other topics knowing full well that silly, lazy sorts will loose out and be confused and befuddled? Try changing political party--many things come then.
Go to CFTB.gov. The rule itself, and a thorough explanation are there. It would be nice if The Times included this info.
I lost my faith in the much touted 'a society of laws' hype when the judicial system winked at two American banks stealing all my money and forcing me to shut down my business. I could not compete against their 100 partners law firm most of whom likely golf with the judges.
What US needs is a law that levels the playing field where the large corporates' money can't be bought to bear in the courts against an average consumer. A consumer court where only the plaintiff and respondent is allowed to present their case without lawyers would do this admirably. But this will never happen. All the laws in the US are really meant for persecuting the common man and protecting the privileged.
What US needs is a law that levels the playing field where the large corporates' money can't be bought to bear in the courts against an average consumer. A consumer court where only the plaintiff and respondent is allowed to present their case without lawyers would do this admirably. But this will never happen. All the laws in the US are really meant for persecuting the common man and protecting the privileged.
26
The only thing that is shameful is that it took a consumer protection agency to preserve the right to go to court. For decades now, the Supreme Court, both Republican and Democrat, has undertaken a mission to destroy the right to civil relief. From arbitration clauses to summary judgments to onerous expert witness requirements and to harsh pleading requirements, the Court has slowly and methodically undermined the right to civil relief--to the benefit of big business. I applaud the CFPD for standing up for consumers and ending mandatory arbitration in this limited context.
31
Agree with all but the "both party thing" it was one party and you know it.
Great to see there are still people fighting for the little guys.
16
Bravo to Richard Cordray and the Consumer Financial Protection Bureau. And no crocodile tears for Wall Street...perhaps consumers having the ability to sue will cause this sector to clean up its act somewhat.
20
Suspend all thoughts on whether or not this rule might make sense in theory. The fact that they could lose billions explains their aversion to the move. They do not care about principle. They care about return on the dollar. That does not keep them from invoking principle as their argument, but honestly, their argument should be "this will cost us tons of money".
18
Imagine that, a Financial Consumer Protection Agency that actually protects the financial consumer. Its odds of surviving a Republican-controlled government? Between zero and none.
44
Not to worry. The GOP and current administration will find a way to undo this consumer/average investor-friendly regulation, just give 'em enough time to put another fox in the public's hen house. The whole idea of consumer protection, whether it be banking, environmental issues, free elections, is under siege. That's the way this current administration rolls and runs amuck and runs roughshod.
14
These mandatory non-negotiable negotiation clause requirements are the greatest evisceration of plaintiffs' rights in U.S. legal history. That the U.S. Supreme Court would deny a plaintiff's right to sue is an absolute scandal, although given the Scalia-era Court, I would call this typical of their contempt for the American individual.
20
I will vote against any legislator who votes against this rule.
29
Wow! Trial and pretrial processes on the merits. What a novel concept.
15
As a citizen, I'm distressed by the idea that I increasingly need to surrender a portion of my constitutional rights (in this case, the 7th Amendment, for which our bravest fought and died) to conduct basic modern activities in our society (like using a cellphone or car).
I'm thirsty for more "We the People," and have had a belly full of "business friendly."
I'm thirsty for more "We the People," and have had a belly full of "business friendly."
31
Get used to it. That is why McConnell stole our supreme court nominee. A Clinton appointee probably would have stood up for this rule. Gorsuch will crush it!
1
Richard Cordray, you are my new hero! Arbitration agreements--mandatory and boilerplate in virtually EVERY contract consumers sign--have spread well beyond their original intent as a way to quickly resolve business-to-business disputes between entities with ongoing business transactions. Under the current scheme, consumers are left with no effective recourse. With fewer arbitration clauses, liable businesses will again face the economic consequences of their unethical and harmful business practices.
32
Class Action Lawsuits aren't exactly a victory for the little people either. How many letters do you get in the mail asking if you are part of a class? How many checks in the mail have you received as a result?
The lawyers on both sides ALWAYS win, while the consumers might win what amounts to postage, the corporation settles for a few million, and passes the losses on to us, the consumer.
The lawyers on both sides ALWAYS win, while the consumers might win what amounts to postage, the corporation settles for a few million, and passes the losses on to us, the consumer.
3
In answer to your question: two and two. Class action works.
4
What a defeatist attitude. Why don't open with, "There's no reason to do anything because everything will turn out badly, no matter what"?
Everything you say is true, but those suits make a company STOP the consumer-unfriendly behavior, whatever it may be.
Wall Street could lose billions? They stole the money in the first place with tricky fees, investing in things nobody understands and expecting the taxpayer to bail them out.
They deserve to lose billions.
They deserve to lose billions.
26
Arbitration clauses are perhaps the most pernicious form of corporate abuse of power against individuals, who have no realistic recourse in the face of unethical or criminal behavior. The very idea of a rigged, secret panel is un-American.
So, of course Republicans are in favor of arbitration clauses.
This rule would reintroduce the rule of law into our dealings with financial corporations. Therefore, very slim chance it will survive.
So, of course Republicans are in favor of arbitration clauses.
This rule would reintroduce the rule of law into our dealings with financial corporations. Therefore, very slim chance it will survive.
20
There is no reason for Wall Street to lose a penny. Just do what's right, follow the law and engage in appropriate and good management employment practices. What is legal is not the same as good management.
8
I am sure financial companies and by extension your local paid for congressional representative will work overtime to kill this rule. Financial malpractice is baked into some of their business plans.
8
It is exceptionally difficult to believe that Wall Street could "lose" billions of what it wasn't entitled to in the first place.
8
I'm a true conservative, and as such am a sworn enemy of corporate america. I voted for Trump and would do so again without question, but cannot support the lunacy of arbitration.
If congress wants to keep it - then it needs to be radically changed, with the secrecy ended and the the option to sue in open court if the consumer loses an arbitration under questionable circumstances.
The repubs are in power across the country because they haven't done stupid things the last few years, if they want to retain their vast edge then they need to support the general public on this issue, and eliminate arbitration, or modify it significantly.
If congress wants to keep it - then it needs to be radically changed, with the secrecy ended and the the option to sue in open court if the consumer loses an arbitration under questionable circumstances.
The repubs are in power across the country because they haven't done stupid things the last few years, if they want to retain their vast edge then they need to support the general public on this issue, and eliminate arbitration, or modify it significantly.
Hypothetical question - If Trump should come out in favor of retaining arbitration rules that favor banks, would that change your view about him?
3
Just bear in mind that Trump is pro-arbitration and against fair access to the courts. He's probably turning out to be the most pro-corporate-America president since before the Depression. And that's a large part of why the Republicans are sticking with him so much through such a rocky start to his presidency. The acid test here to watch out for will be whether or not he makes life more difficult for Cordray, an Obama appointee who opposes arbitration, and the CPFB agency that he heads. Watch closely is my advice.
5
Read the article carefully. Your boy Donny already reversed an Obama rule that restored the right to sue over nursing home abuses. Now its back to arbitration!
My son spent the last two years writing and working on this rule for the CFPB. Way to go.
13
Well spent time and effort! May the fruits of this be bestowed upon us all!
2
Forcing customers to agree to arbitration to resolve disputes is yet another example of the perils that follow from the over-concentration of power in the hands of the few. Of course this practice should be abolished. If corporations think arbitration is so great, let them try to sell it, by offering it as an option, and providing incentives for customers to opt for it. I don't have high hopes for repeal, though, once Donald and the Toads start throwing their weight around.
13
On the homepage of the NT Times website the headline for this article is
"Wall St. Could Lose Billions if U.S. Ends Forced Arbitration." We have an editor focused on ensuring corporations that systematically defraud consumers continue to craft contracts that immunize themselves from accountability. The 7th Amendment right to a civil jury trial that every American is entitled to has been effectively repealed by mandatory arbitration. Bravo to the CFPB. The headline should be "Government Agency Restores Power To Consumers To Stop Fraud."
"Wall St. Could Lose Billions if U.S. Ends Forced Arbitration." We have an editor focused on ensuring corporations that systematically defraud consumers continue to craft contracts that immunize themselves from accountability. The 7th Amendment right to a civil jury trial that every American is entitled to has been effectively repealed by mandatory arbitration. Bravo to the CFPB. The headline should be "Government Agency Restores Power To Consumers To Stop Fraud."
28
"..freeing consumers to band together in class-action lawsuits that could cost the institutions billions of dollars."
HA HA HA! Cost the institutions billions? How about new hidden fees passed on to customers which will recoup those "billions" in a matter of months...
HA HA HA! Cost the institutions billions? How about new hidden fees passed on to customers which will recoup those "billions" in a matter of months...
7
This article is loaded with anti-arbitration innuendo. The problem isn't arbitration; the problem is when the rules or procedures of arbitration are unfair. These issues can be addressed, and fixed.
Why did the author not spell out the delays, expenses, gamesmanship, unfairness, and follies in the pursuit of litigation? Arbitration can be faster and cheaper. It can be more flexible, and responsive. In my own experience, arbitrators tend to be more cognizant of, and concerned with, the rights of the less-powerful party than are judges. Litigation is no magical panacea.
The author's bias against arbitration harmed what might have been a better article. Fix what's wrong with arbitrations, rather than just hurling around incomplete or inaccurate platitudes about them.
Why did the author not spell out the delays, expenses, gamesmanship, unfairness, and follies in the pursuit of litigation? Arbitration can be faster and cheaper. It can be more flexible, and responsive. In my own experience, arbitrators tend to be more cognizant of, and concerned with, the rights of the less-powerful party than are judges. Litigation is no magical panacea.
The author's bias against arbitration harmed what might have been a better article. Fix what's wrong with arbitrations, rather than just hurling around incomplete or inaccurate platitudes about them.
9
the article isn't anti-arbitration; it's anti-forced arbitration, and "forced" is the key term. yes, arbitration can be faster, cheaper, more flexible, and responsive, but in a fair market, litigation would be the default conflict resolution method, with arbitration available if both parties agree to it. prohibiting consumer litigation gives corporations a license to do whatever they want, which is never good for consumers.
16
The problem is exactly arbitration. Just like litigation, arbitration is a good process only when both sides have adequate resources to present their cases. For small claims, arbitration is too expensive relative to the harm--there is no fix for this. Deep pockets know this, so they engage with impunity in deceptive or other harmful practices that cause small harms to lots of people. Class actions can put a stop to this, by pooling resources. Often the beneficial outcome is not the recovery made by the plaintiffs but the discontinuation of the deceptive practice. Forced arbitration deprives society of a useful tool for combating abuses.
12
While I appreciate Kim and GCC replying to my comment, I think their comments (like most others here) are overly reactive and conclusory. The equivalent of "class actions" could be permitted in arbitrations, and should be. There should be a fair process of picking arbitrators. Yes, a big company will have more cases, but multiple persons will pick arbitrators in individual (or "class action") proceedings, and a list of "public arbitrators" could easily be compiled, who have experience being appointed regularly by the "claimants" in such proceedings. Other aids to fairness could be used as well, such as expenses being paid to the prevailing party, availability of exemplary damages, and conditions for the lifting of confidentiality.
The Financial Regulatory Authority has done a very nice job in managing arbitrations involving securities and investment firms. I serve as an arbitrator in FinRA cases. My experience is that investors typically get far more solicitous and understanding treatment in FinRA arbitrations than they ever would before a judge, and the dispute can be addressed far more quickly and somewhat less expensively. I'm sure there will be folks (especially those who have lost such cases) who will feel differently, but they should also consider how their claims would have fared in Court.
The Financial Regulatory Authority has done a very nice job in managing arbitrations involving securities and investment firms. I serve as an arbitrator in FinRA cases. My experience is that investors typically get far more solicitous and understanding treatment in FinRA arbitrations than they ever would before a judge, and the dispute can be addressed far more quickly and somewhat less expensively. I'm sure there will be folks (especially those who have lost such cases) who will feel differently, but they should also consider how their claims would have fared in Court.
I'm sick of hearing claims of "regulatory over-reach" by Republicans. Fair but firm regulations can balance the needs of consumers and society as a whole against business interests. Remember the case of Brooksely Born, the chairwoman of the CFTC, who tried to regulate credit default swaps? She saw the financial crisis coming, tried to prevent it, and was tossed by people who favored the big banks. Kudos to Richard Cordray for standing for consumers on arbitration. I'll bet Congress figures out a way to gut his agency over this. We know who pays for their campaigns.
23
Arbitration was created to allow corporations to avoid the time and expense of litigation. Keep in mind: it was an option, not an obligation. That is still true. contrast that with arbitration as it applies now to consumer contracts. Consumers are now required to arbitrate disputes. No choice. And we're to believe this is good. Sounds like dialogue from Alice in Wonderland.
8
Let's be clear - Wall Street won't lose billions. Since this rule applies to all banks no one will gain any advantage so in a competitive market it will simply mean added costs on all that will be passed on to depositors (in various fees) and borrowers (in interest rate margin and fees). Only way Wall Street pays is where a fine is imposed on one bank but not others - in such a situation cost cannot be passed on since competitors do not face such cost.
3
Forced arbitration: Worst degradation to the constitutional right to jury trials in history. Appalling.
24
"But as much as Republicans deplore the consumer protection agency, they may find it difficult to kill a rule that could have wide populist appeal."
Why would anyone think they'd pause for even a second? How popular is the healthcare bill?
Why would anyone think they'd pause for even a second? How popular is the healthcare bill?
16
Financial institutions would lose nothing if they do not commit fraud as did Wells Fargo with the phony accounts or as did JP Morgan Chase in foreclosing on active duty service members in violation of federal law. But the Supreme Court attempted to load the deck in favor of financial institutions by allowing mandatory arbitration clauses to block class actions in court and not even allow class action arbitrations.
Alan Kaplinsky of Ballard Spahr has made a lot of money helping the banks to engage in practices adversely affecting their customers and depositors without allowing them to go to court to file class actions against the improper and illegal bank behavior.
One must also understand that arbitrations are often expensive requiring payments to the arbitrators as well as a claimant's lawyer. Arbitration fees are themselves a deterrent to resolution of legitimate claims.
Alan Kaplinsky of Ballard Spahr has made a lot of money helping the banks to engage in practices adversely affecting their customers and depositors without allowing them to go to court to file class actions against the improper and illegal bank behavior.
One must also understand that arbitrations are often expensive requiring payments to the arbitrators as well as a claimant's lawyer. Arbitration fees are themselves a deterrent to resolution of legitimate claims.
16
Those that have most of the money have most of the "votes" in the "free market." That is why they are constantly trying to convince us that markets are democracy, instead of the government created by our constitution, which doesn't mention markets or corporations,
The rich never have a problem with lawsuits or lawyers until someone is suing them. They have no problem suing you, and will defend to someone elses death their right to do so.
The constitution creates the courts so that people that feel wronged don't have to take matters into their own hands and instead find an impartial judge to rule on their grievances., Arbitrators are usually paid by the corporation. They know who pays their bills.
Under the constitution government is the expression of our democracy, not corporations. Those that argue markets are better than government are arguing against democracy and for plutocracy, rule by the rich.
The rich never have a problem with lawsuits or lawyers until someone is suing them. They have no problem suing you, and will defend to someone elses death their right to do so.
The constitution creates the courts so that people that feel wronged don't have to take matters into their own hands and instead find an impartial judge to rule on their grievances., Arbitrators are usually paid by the corporation. They know who pays their bills.
Under the constitution government is the expression of our democracy, not corporations. Those that argue markets are better than government are arguing against democracy and for plutocracy, rule by the rich.
29
Your comment should be required reading for politicians. I know the Republicans won't agree but maybe the Democratic will be reminded of what their party used to stand for before it sold out to Wall Street.
9
When arbitration first came on the scene it was hyped as a way to unburden the heavy court load and delays, less expensive and more for litigants. As an attorney I can vouch it has become nothing of the sort. If you use AAA (American Arbitration Association) they slam you with fees. The arbitrator in many cases , a retired judge- $400 an hour. A young entrepreneur entered into a franchise agreement that called for AAA arbitration. She sank her savings and the franchisor breached the Agreement but claimed she had. Up fron retainer fees for the arbitrator, AAA fees, several mopnths of partial testimony, documents etc., She was overwhelmed but fortunately, in this case she happened to prevailed. See the NY Times series on Arbitration that appeared in 2015
Arbitrate away, but with neural arbitrators.
An arbitrator who has been employed more than a few times by a firm (whether a business, or plaintiff law firm) ought to be assumed to not be neutral, unless both parties agree otherwise.
And do eliminate secrecy clauses, so offended parties might know that they are not alone.
An arbitrator who has been employed more than a few times by a firm (whether a business, or plaintiff law firm) ought to be assumed to not be neutral, unless both parties agree otherwise.
And do eliminate secrecy clauses, so offended parties might know that they are not alone.
13
The Supreme Court has not been doing its job -- years ago, as the article indicates, it could have thwarted this violation of our due process rights to seek judicial redress and failed to do so. When the Supreme Court and the executive branch and the legislature are all looking to tilt the balance away from the common man and woman, we are really in a pickle.
19
.
I'm seeing that many people have the totally false notion that "arbitration" is somehow FAIR.
NONSENSE!
Right now, the big corporation (the seller) will not even talk to you until you sign their disclosure agreement (which includes requiring you to agree to arbitration for any dispute). You're sunk before you even know what you're getting into.
First, it's the company that writes the (multipage) disclosure; and they do it in a way that is completely favorable to them - anything else would cut into their profits.
Second, you'll never even read what you're signing ... because of that multi-page stuff.
Third, if you later have a problem that can't be solved pre-arbitration, you'll find that your ONLY choice is that arbitration.
Fourth, while it kinda sounds like an "arbitrator" would be in some manner "fair," he's paid by the company. That's nice; it cuts down your expenses ... until you notice which side of the dispute is buttering the arbitrator's bread!
Fifth, even if the arbitrator WANTED to take your side, all he has to work with is that disclosure statement that was carefully written to completely leave you out in the cold.
Lastly, if you give up on arbitration and decide to take things to court (either by yourself or as part of a group), go back to #3.
At this point, you - as a citizen - will have discovered that the third branch of our government - the judiciary - is not available to you!
I'm seeing that many people have the totally false notion that "arbitration" is somehow FAIR.
NONSENSE!
Right now, the big corporation (the seller) will not even talk to you until you sign their disclosure agreement (which includes requiring you to agree to arbitration for any dispute). You're sunk before you even know what you're getting into.
First, it's the company that writes the (multipage) disclosure; and they do it in a way that is completely favorable to them - anything else would cut into their profits.
Second, you'll never even read what you're signing ... because of that multi-page stuff.
Third, if you later have a problem that can't be solved pre-arbitration, you'll find that your ONLY choice is that arbitration.
Fourth, while it kinda sounds like an "arbitrator" would be in some manner "fair," he's paid by the company. That's nice; it cuts down your expenses ... until you notice which side of the dispute is buttering the arbitrator's bread!
Fifth, even if the arbitrator WANTED to take your side, all he has to work with is that disclosure statement that was carefully written to completely leave you out in the cold.
Lastly, if you give up on arbitration and decide to take things to court (either by yourself or as part of a group), go back to #3.
At this point, you - as a citizen - will have discovered that the third branch of our government - the judiciary - is not available to you!
26
And, pray tell, exactly what did Obama do to end the arbitration rule other than to take a half a million in fees from the banks as soon as he left office. Note: there is no such thing as a coincidence (or a conscience).
9
You are not very studious, if knew anything you would know that Obama supported the creation of the Consumer Financial Protection Bureau, the very agency that is allowing class action suits against banks.
19
I studied the headline and read the article and it seems the arbitration clause is still very much in place. Did I miss something? Unless we see some action and not just talk then perhaps it was just more distracting cosmetics by Obama, not unlike his "red line". Will the arbitration rule stay in place? You can bank on it.
"...but lawmakers will face pressure to block it."
From whom? Oh, from the very people who are perpetrating harm on people? This is just one more example of legalized corruption in the USA.
From whom? Oh, from the very people who are perpetrating harm on people? This is just one more example of legalized corruption in the USA.
50
Corporations rule. No chance for justice. Please stop teasing us.
13
A note to share with your congressman and women as I just did.
Congressman:
Mr. Hensarling is acting like the sludge that should be drained along with the crony banking lobby that he represents rather than the working people of Texas (insert state). By suggesting that the CFPB is somehow misaligned with the popular interest and adding to the bureaucracy in Washington is neglecting the bureaucracy that exists in equal measure in the private sector - often to the detriment of consumer rights.
Please urge him to quit this line of talk and come to his senses. If you also require any convincing, please get in touch.
Congressman:
Mr. Hensarling is acting like the sludge that should be drained along with the crony banking lobby that he represents rather than the working people of Texas (insert state). By suggesting that the CFPB is somehow misaligned with the popular interest and adding to the bureaucracy in Washington is neglecting the bureaucracy that exists in equal measure in the private sector - often to the detriment of consumer rights.
Please urge him to quit this line of talk and come to his senses. If you also require any convincing, please get in touch.
6
Republicans are nothing if not loyal to their corporate patrons. When they say they are doing things for "the American people" I wonder, what Americans are they talking about? Not regular Americans forced to sign away their right to sue for unscrupulous business practices, that's for sure, and their vendetta against the CFPB is proof positive.
12
Expect the Republicans and Trump to counteract this rule as quickly as they can finish removing all the other policies that have protected Americans' health, environment and safety over most of the lives of those around today. Then, the recourse will be consumer boycotts and bad press for the bad corporate citizens - a blunt instrument but one that can be effective, as in the case now leading to the decline of Wells Fargo. One can only hope that the political opponents of the oligarchs' DC puppets are keeping complete lists of the protections that voters have lost for use in the coming campaigns.
5
here we all go-again:
We-The-People stripped clean by They-The-Corporations - -
{ aka: Super(ior) 'Person-ages', thanks-to SCOTUS' "errors" }
hang-on: 'cause Congress will whip this puppy straight soon enough.
grrrrrrrr
3
Interesting how this article only has 144 comments, while the Trump Russian story has thousands. What affects you more??
18
It is the Russian "story" that is enabling this atrocity.
1
So far.
You might note that the number of comments posted here is not the number submitted, but the number and content approved and posted by the NY Times' staff. Which affects them the most? That is the question rather than which effects you the most.
If Alan S. Kaplinsky, Esq. is so sure arbitration is better for plaintiffs, then let it be an option at the plaintiff's election, but also allow class actions.
9
“A cherished tenet of our justice system is that no one, no matter how big or how powerful, should escape accountability if they break the law,”
Another tenet of our legal system is that a contract, freely signed, is binding on all signatories. If people agreed to arbitration then they go to arbitration.
Another tenet of our legal system is that a contract, freely signed, is binding on all signatories. If people agreed to arbitration then they go to arbitration.
1
So, no credit cards or health insurance for you? No employment contracts, no car rentals, no airplane flights? Get real.
9
Another tenet of our system is that collusion between big players in a market is subject to anti-trust law, but somehow, banks and credit card corporations are able to go to conferences where they turn fraudulent practices like arbitration clauses buried in the fine print into "industry standards."
If arbitration clauses are so awesome for consumers how come they are notadvertised, instead of being buried in fine print. If markets are about the freedom to chose, which accounts don't have it?
If arbitration clauses are so awesome for consumers how come they are notadvertised, instead of being buried in fine print. If markets are about the freedom to chose, which accounts don't have it?
13
Your first point doesn't hold for the rich and powerful. Did anyone ever put a stop to Trump's business practices? Or any of the bankers go to jail? Of course not.
And your second point about the sanctity of contracts? That only applies to ordinary Americans. The only promise Trump ever kept was to get even with anyone who criticizes him. Try to get paid for overtime you might have worked and to which you are entitled? Not likely in arbitration world.
And your second point about the sanctity of contracts? That only applies to ordinary Americans. The only promise Trump ever kept was to get even with anyone who criticizes him. Try to get paid for overtime you might have worked and to which you are entitled? Not likely in arbitration world.
2
As a lawyer for four decades, I agree that arbitration clauses in consumer contracts, whether they be with securities firms, banks, internet providers, or other contracts that involve the consuming public are not with parties of even close to equal bargaining power.
But at the same time class actions involving hundreds or thousands of consumers gouged by small charges typically benefit only the class action lawyers.
One solution might be to allow consumer class actions, thereby overriding truly unfair arbitration clauses, but cap the class action lawyers' fees at, say, 25%, or maybe less, of total recoveries so that the class at least gets 75% on the dollar.
But at the same time class actions involving hundreds or thousands of consumers gouged by small charges typically benefit only the class action lawyers.
One solution might be to allow consumer class actions, thereby overriding truly unfair arbitration clauses, but cap the class action lawyers' fees at, say, 25%, or maybe less, of total recoveries so that the class at least gets 75% on the dollar.
50
The problem with that may be found in the percentage of members of congress who are also lawyers.
It's not about the individual consumers recouping their $35 overdraft fees, etc. It's about the institutions (corporations) taking the hit of paying back millions of illegally obtained $35 fees...and the loss of future millions of $35 fees. It's about teaching them a lesson they will never forget in the only language they speak. Who cares if lawyers get rich off of it?
1
Well as a lawyer with four decades of practice, I find that you ignore the benefit to society from class actions. Yes the plaintiffs' lawyers can make good money if they are successful, but they usually work for years on these cases with thousands of hours of work. But my guess is you are a defense lawyer who probably has represented the rich and powerful for your four decades of legal work. You and your kind have ruined the justice system for average folks. Get a life.
1
That's right: like Rep Jeb Hensarling says the people of this country esp the GOP voters voted against their own self-interest and with a yearning to be sacrificial to corporations, all in the name of "freedom".
13
The class-action lawyers may get the bulk of the settlement, but they also put up the considerable costs of fighting what are often multi-billion companies in litigation that can last for years.
16
The arbitration system as it currently exists was created by corporations to avoid having to comply with the law. Once corporations are allowed to evade the court system entirely, and then are able to prevent consumers and employees from suing them as a group, there is almost no limit to the unethical and illegal acts that a corporation can get away with. The court system is not perfect and is certainly slow, but arbitration is often slower. And once class actions are forbidden, companies (with unlimited resources) have far greater ability to fight off the few individuals able to file arbitrations against them. With forced arbitration and class action waivers, corporations have rigged the system to take power away from the people - meaning that consumers are free game. Fraud, corruption, cheating - its a free pass for the company.
44
I accept the argument that arbitration avoids lawsuits that cost everyone a lot of money. The problem is in the choice of arbitrator. If, for example, the consumer had a choice between an arbitrator chosen by the corporation and one chosen by a group such as Consumers Union (the publisher of Consumer Reports), the unfairness of the arbitration system would be avoided. But of course corporations choose arbitrators with a record of favoring corporations.
11
Arbitrators have an incentive to favor the large company against the small consumer. If the arbitrator decides in the company's favor, it will get more business from that company. The consumer likely doesn't have any more arbitration business to bring. It is not a level playing field.
18
Proponents of arbitration clauses love to trot out the old "this will just line the pockets of class-action lawyers" to defend their system of rigging the system in favor of large institutions, but they conveniently omit that mandatory arbitration clauses has turned arbitration into an extremely lucrative sub-industry in the legal field.
8
During the 2008 debacle, I determined to drop all my major bank accounts and do my banking at my local credit union. (In my case, "Oregon State Credit Union," but they are all over the country.)
As a part owner of "my bank," I no longer have to put up with any of the crap dished out by the likes of Wells Fargo, B of A, etc. Just the opposite — the bank actually cares about me, as demonstrated in a number of its policies and practices.
An additional bonus is that my credit union's profits are all invested locally.
So, as well as bellyaching about how Wall Street is cheating us all, take an hour and move your bank account. You'll be glad you did, and so will your country.
As a part owner of "my bank," I no longer have to put up with any of the crap dished out by the likes of Wells Fargo, B of A, etc. Just the opposite — the bank actually cares about me, as demonstrated in a number of its policies and practices.
An additional bonus is that my credit union's profits are all invested locally.
So, as well as bellyaching about how Wall Street is cheating us all, take an hour and move your bank account. You'll be glad you did, and so will your country.
27
Did the same thing up here around the same time and couldn't be happier.
Only the attorneys willing to take on such class action lawsuits will make any type of gains.
2
MDCooks8, very very far west of the Hudson: Missing the point entirely, aren't we?
"...the amount of money an individual obtains in a class action is beside the point. Class actions ... are intended to help big groups of people get back small amounts of money — say a $35 overdraft fee. More important ... class actions can push companies to get rid of questionable business practices."
"...the amount of money an individual obtains in a class action is beside the point. Class actions ... are intended to help big groups of people get back small amounts of money — say a $35 overdraft fee. More important ... class actions can push companies to get rid of questionable business practices."
8
So will the consumers who have been wronged.
1
How much, 10 cents on the dollar....
Mandatory arbitration clauses are an evil that should be banned in all business transactions whether between businesses or between businesses and consumers. There is definitely a value in some cases to undertaking alternative dispute resolution (ADR), i.e, mediation or arbitration, rather than litigation, but parties to a contract should not be required to agree to do so by contract before any dispute arises. If all parties to the dispute can agree on an ADR process then so be it, but not otherwise. The unfortunate truth of litigation is that whichever party has more money has the advantage, and if that party has already set the terms of dispute resolution through arbitration as well as the specific arbitration process, then that party has an overwhelming advantage. I expect that the GOP will not let this rule stand since the GOP has been bought and paid for by the very people putting these mandatory arbitration clauses into contracts.
8
Arbitration is not necessarily a bad thing. It's faster, cheaper, and can easily come to a reasonable result.
The problem with arbitration in consumer settings is that the arbitrator is limited to the language of the contract between the parties. The very idea that one of those consumer finance agreements is negotiated by parties with equal bargaining power is ridiculous. If those are contracts of adhesion where one party is "forced" to accept terms that are not clearly spelled out BEFORE the contract becomes complete and those terms are detrimental, only the courts can address that issue; it's beyond the scope of the arbitration agreement.
Arbitration can be fair, faster, and cheaper. One suggestion might be that the entity who put the arbitration clause in a consumer contract have to pay the entire cost of the arbitration proceeding.
The problem with arbitration in consumer settings is that the arbitrator is limited to the language of the contract between the parties. The very idea that one of those consumer finance agreements is negotiated by parties with equal bargaining power is ridiculous. If those are contracts of adhesion where one party is "forced" to accept terms that are not clearly spelled out BEFORE the contract becomes complete and those terms are detrimental, only the courts can address that issue; it's beyond the scope of the arbitration agreement.
Arbitration can be fair, faster, and cheaper. One suggestion might be that the entity who put the arbitration clause in a consumer contract have to pay the entire cost of the arbitration proceeding.
7
The corporation usually does pay for the arbitration and the arbitrator knows full well who signs their check.
Arbitration favors the party with more money and resources. That's why banks, insurance companies, HMO's, cable/satellite TV, etc. want it and force consumers to take it. The last thing they want is a trial, or worse yet, a jury trial - then they might lose.
6
Litigation favors the party with more money even more than arbitration does. The real thing they want to avoid is class actions because that's where their liability if they lose can get big enough to notice
4
I fully support laws that promote business and remove unnecessary red tape, but even as a pro-business person I think this is a great thing. Consumers have very limited ways to challenge businesses over unethical practices; so class action lawsuits are essential. Any negative impact on businesses by this will be made up for by the additional protections it gives to consumers.
8
Ben, as a note it is the definition of "unnecessary red tape" that is at the root of disagreement over business in this country. Some of us believe that an oil company or steel mill, (any business really) should be 100% on the hook for any environmental damage they cause. Conversely some people think rules and laws that hold businesses accountable for the damage they do to America are "unnecessary red tape".
Please be clear I am not picking at you, but the definition is critical and extremely situation dependent.
Please be clear I am not picking at you, but the definition is critical and extremely situation dependent.
This is one attempt to get rich CEOs at large private institutions to respect and fairly treat thousands of their customers - actual real people. Many of these unfair/illegal practices continue because there is no effective legal remedy. This is rightly one way to convince large corporations that compliance with law is critical and fraud is illegal. I wouldn't worry too much about the corporations. Most class actions settle for pennies on the dollar - the companies have to clean up their act for the practice in question, but just go on to the next scam. The damages, although minimal, will then likely be tax deductible. The only people who will make money out of this are the lawyers, they will earn it.
2
Worse yet, the "neutral" arbitration forums sometimes are neutral in name only. I was hired as a lawyer arbitrator for one of the largest national arbitration associations, located in the Midwest. Once a plaintiff like a credit card company obtains an arbitration award, the process in many states to convert it to a judgment for collection purposes is quite simple and streamlined.
I started to get a small stream of cases involving pursuit of credit card debt. Mostly there was no real dispute over the amount and whether the card was used by the holder. But in certain instances, when the petitioner/plaintiff had acquired the debt from another company, I required proof that the petitioner actually owned the claim. This was sometimes quite cumbersome for the petitioner/plaintiff.
The result? My small stream of cases went to zero.
I started to get a small stream of cases involving pursuit of credit card debt. Mostly there was no real dispute over the amount and whether the card was used by the holder. But in certain instances, when the petitioner/plaintiff had acquired the debt from another company, I required proof that the petitioner actually owned the claim. This was sometimes quite cumbersome for the petitioner/plaintiff.
The result? My small stream of cases went to zero.
6
Well, of course, Wall Street could lose billions. That is what happens when they have the deck stacked in their favor. The billions are those Wall Street shouldn't have had to begin with.
This is one of many issues that is supposed to be drained from the Wall Street swamp, but seeing that they occupy a large portion of the Trump administration I won't hold my breath.
This is one of many issues that is supposed to be drained from the Wall Street swamp, but seeing that they occupy a large portion of the Trump administration I won't hold my breath.
27
Imagine corporatons and banks actually being responsible for their fraud! Of course they pay good money to Congress to insure that will not happen. Do not be too alarmed -- the burden will fall on the shareholders, not the executives and board who are responsible for the fraud.
11
Great! Maybe now, someone will take on the 20 plus years of Canadian Tax withholding negligence within the industry!
1
Well, we know in which direction this will go considering that Congress is bought and paid for by big interest.
4
We've seen the farce played out before and know how it's going to end.
Shock and surprise, not in the least, a Democratic appointee in a Democratic bureaucratic government agency making it easier for trial lawyers, shock and surprise, to sue business. WOW, what a new surprise that the Democrats try to feed their own donor and interest groups......
2
No worries. The GOP is trying just as hard to appease its donors on Wall Street as well as add to their presidents own coffers. So we are even.
2
This is just trolling...pure and simple...
3
Shock and and surprise, a republican not mentioning it is only the greedy crooked mega-wealthy who are even remotely "hurt" by repealing mandatory arbitration!
Mandatory arbitration is actually another phrase for stealing the right to have one's civil rights protected in open court!
Beware any organization that stacks the deck and doesn't let a person fight back !
Reminds me of Republican led states who are trying to make it illegal for cities to pass their own environmental laws for their communities. So much for small government.
Pick up a Republican rock (political office) and there will be a Republican snake under it, waiting to bite a hard-working American citizen.
Hope Wall Street loses big time! Enough with their corporate welfare!
Mandatory arbitration is actually another phrase for stealing the right to have one's civil rights protected in open court!
Beware any organization that stacks the deck and doesn't let a person fight back !
Reminds me of Republican led states who are trying to make it illegal for cities to pass their own environmental laws for their communities. So much for small government.
Pick up a Republican rock (political office) and there will be a Republican snake under it, waiting to bite a hard-working American citizen.
Hope Wall Street loses big time! Enough with their corporate welfare!
3
I am no fan of Trump, Hensarling, or their ilk, but on this one caveat emptor. The average person does not benefit from moving disputes from arbitration to court. To the contrary: arbitration is lower cost and much faster than court, allowing far more individual plaintiffs to bring cases than court proceedings. On the other hand, class action lawsuits are very lucrative for the lawyers, and the individual complainants often get a settlement, or award, spread thinly across the class of plaintiffs, after the lawyers have been paid.
4
.
RS
You might notice that - in the current system - banks & other financial institiutions (such as cell phone companies) extract BILLIONS of dollars from the general public. And, I'm guessing that you are a member of that general public.
The "current system" might have the nice-sounding name of "arbitration," but - in fact - it's a kangaroo court where everything is stacked against the individual. By that I mean that the company writes the rules & pays the "judge" ... you're just a fish in the barrel.
Yes, it's "cheaper & faster" than court ... but that just let's them appropriate your money all the sooner.
RS
You might notice that - in the current system - banks & other financial institiutions (such as cell phone companies) extract BILLIONS of dollars from the general public. And, I'm guessing that you are a member of that general public.
The "current system" might have the nice-sounding name of "arbitration," but - in fact - it's a kangaroo court where everything is stacked against the individual. By that I mean that the company writes the rules & pays the "judge" ... you're just a fish in the barrel.
Yes, it's "cheaper & faster" than court ... but that just let's them appropriate your money all the sooner.
6
If Arbitration is so easy, cheap and fast, why don't consumers take advantage of it? How do we know the Arbitration Company isn't somehow connected to the bank? (Hint: they are.)
I had a dispute with Wells Fargo. I called them, wrote letters, all to no avail. They finally contacted me and told me my only option was arbitration. After looking at the facts, I could see that was not going to be a good option for me.
As far as the "average person" benefitting from class action, I would posit the "future average people" will benefit when the corporate banks stop the bad behavior.
Sometimes, that push has to have teeth. That's what class-action suits do -
The day after I filed a complaint (online) with the DFPB, the bank called me, apologized and then sent me a letter explaining their position.
Problem solved.
Moral of the story, sometimes these big, powerfull businesses need a little push to do the right thing. The CFPB is exactly that.
I had a dispute with Wells Fargo. I called them, wrote letters, all to no avail. They finally contacted me and told me my only option was arbitration. After looking at the facts, I could see that was not going to be a good option for me.
As far as the "average person" benefitting from class action, I would posit the "future average people" will benefit when the corporate banks stop the bad behavior.
Sometimes, that push has to have teeth. That's what class-action suits do -
The day after I filed a complaint (online) with the DFPB, the bank called me, apologized and then sent me a letter explaining their position.
Problem solved.
Moral of the story, sometimes these big, powerfull businesses need a little push to do the right thing. The CFPB is exactly that.
3
but do you think every class action has merit?
is it possible that in part this is simply a business where at times a group of law firms have learned to mine the legal system...where some cases are settled because the the companies and the plaintiffs lawyers neither want to go to trial regardless of who is right and who is wrong because that is too expensive? the companies will pay to make it go away and the plaintiff lawyers are more than willing to settle because that serves their interest (rather than their clients)...
why did the article not present alternative perspectives and describe expert based solutions that serve everyone's interests...
do you think that the academic legal and business communities have not examined consumer protection (likely ad nauseam)? why was this not presented ?
is it possible that in part this is simply a business where at times a group of law firms have learned to mine the legal system...where some cases are settled because the the companies and the plaintiffs lawyers neither want to go to trial regardless of who is right and who is wrong because that is too expensive? the companies will pay to make it go away and the plaintiff lawyers are more than willing to settle because that serves their interest (rather than their clients)...
why did the article not present alternative perspectives and describe expert based solutions that serve everyone's interests...
do you think that the academic legal and business communities have not examined consumer protection (likely ad nauseam)? why was this not presented ?
2
Trump is sure to fire Mr. Cordray and steal the billions back for Wall Street. We have a fake government. All three branches. Sad.
12
Che, he cannot fire Cordray, at least not under the current law, which has Trump and his toady R's furious.
This is huge. Up to this time the forced arbitration meant the banks could do anything they wanted and the consumer be d.....
Now, let's see if Trump will back the little people or most likely big corporations No real guess work needed. Defend canceling the rule, which given the track record of this young administration, is most likely what Trump and Company will do. Hmmmm - will the argument to cancel this rule be: make more jobs, or make America great again....?
Now, let's see if Trump will back the little people or most likely big corporations No real guess work needed. Defend canceling the rule, which given the track record of this young administration, is most likely what Trump and Company will do. Hmmmm - will the argument to cancel this rule be: make more jobs, or make America great again....?
3
This will be welcome relief from the on-going rape of America. But we have such a long way to go before the country is made whole. Corporations, vested interests and spineless politicians have driven this country into the ground.
4
This something that won't stand. For Republicans "no" never means "no."
"The change would deal a serious blow to Wall Street and could wind up costing financial firms billions of dollars.". You mean, the arbitration clauses are currently costing consumers (and saving bankers) billions of dollars.
12
As with anything else, a cost increase to a firm is partially passed along to the consumer. Increased regulations shall and always will add cost to the very service or good to which it is intended to help. Sure, this can be viewed as a win for the individual, but maybe the result is a .25% interest rate increase to credit card market as a way to subsidize the cost, actual or perceived.
2
Mostly Correct: I'd rather have the bank charge me a fee up front than have them offer me a "deal" and then have money stolen from me later.
I personally think that Dodd-Frank has largely killed community banking because it was designed by Wall Street to do that among other things that it does that are problematic. That said, I believe that this is a good thing provided that the trial lawyers get no more than 5% in compensation from any award.
1
Wake up people! For all the hullabaloo about the ACA, saving the Consumer Financial Protection Bureau is equally important. The agency costs the government little and it exists to protect us. The corporations that are fighting it do so to protect their pockets not the people's. As major contributors to our elected pols, they are collectively beating their chests about how they will suffer if the little man has the power to band together and challenge unfair business practices. Read between the lines and remember that an allegation is not a fact. Corporations benefit from obscuring/diluting/erasing your rights in pages of fine print. And when they collude on these issues, it's not as if you can take your business to a competitor and get fairer treatment. Divide and Conquer. By dividing people, they're not a threat, you can control them.
17
There are banks that I have done business with for many years that have added forced arbitration clauses to their contracts. Someone has convinced these firms that this is desirable. Theses same firms are spending millions on advertising. Don't they see the contradiction?
3
The GOP has been after this agency ever since it was created. Much of their effort was focused on a key provision of its creation...that its funding come from outside the regular budget process so that it would not be subject to political interference.
And guess what the GOP has tried to do ever since...reverse that so that if they can't kill the agency outright, they can slowly strangle its effectiveness as they have done over the years with things like the SEC and the Federal Elections Commission.
And guess what the GOP has tried to do ever since...reverse that so that if they can't kill the agency outright, they can slowly strangle its effectiveness as they have done over the years with things like the SEC and the Federal Elections Commission.
15
Our dear friends in the political right forever and always trumpet accountability. The new law seems precisely to promote accountability. I'm waiting for them to cheer.
8
Cheer here, as we believe the individual should have more choice. The arbitration opt-in leaves little choice. The only opt-out is to simply opt-out by abstention, which could be construed as a choice.
You see the comparison, correct? ...Forced mandate to purchase health care.
You see the comparison, correct? ...Forced mandate to purchase health care.
I gather the concept of false equivalence eludes you. Pity.
Class action suits were developed to allow ordinary consumers to take on big business in court, when they would not ordinarily be able to afford to do so.
But there is a major problem. Class actions have come to be horribly abused by the legal profession, to the point where they do far more harm than good. Each month I receive at least one fine-print document in the mail informing me that a class action settlement has been reached involving some normally functioning product I purchased years ago. The settlement awards me nothing, and the lawyers millions. These never-ending lawsuits do nothing except enrich attorneys, and raise the price of countless products.
If the consumer protection bureau is to enable class action lawsuits, they must reform the process so they accomplish their intended purpose, and not merely serve as a boondoggle and windfall for lawyers.
But there is a major problem. Class actions have come to be horribly abused by the legal profession, to the point where they do far more harm than good. Each month I receive at least one fine-print document in the mail informing me that a class action settlement has been reached involving some normally functioning product I purchased years ago. The settlement awards me nothing, and the lawyers millions. These never-ending lawsuits do nothing except enrich attorneys, and raise the price of countless products.
If the consumer protection bureau is to enable class action lawsuits, they must reform the process so they accomplish their intended purpose, and not merely serve as a boondoggle and windfall for lawyers.
14
I worked for what was, at the time, one of the largest and most successful Plaintiff's class action law firms in the world. Some of what you say is quite true but you do not understand that those class actions do stop large companies from engaging in fraudulent and other equally illegal practices. Unfortunately, SOME attorneys and corporations structure settlements in ways that offer little in the way of meaningful benefits for consumers but it is also true that many plaintiffs suffer insignificant losses. Being able to join all of those plaintiffs into a class action scares the daylights out of most corporations, and leads to the cessation of questionable practices. Class actions, while imperfect, are far more efficient and fair than required arbitration.
8
This, of course, is completely correct
1
If forced arbitration is banned, there needs to be concurrent class-action reform, specifically in the areas of forum-shopping and "class action blackmail," where companies settle dubious claims because it is cheaper than litigating.
1
I'm a lawyer, and you won't be surprised that I never proposed an arbitration clause in order to be fair to the other party or quick, inexpensive resolution of issues. It was always for tactical advantage just in case.
In negotiated business to business contracts, it doesn't hurt to ask, or refuse an arbitration clause. To allow the imposition in a take it or leave it, buried in the contract consumer transaction is wrong.
In negotiated business to business contracts, it doesn't hurt to ask, or refuse an arbitration clause. To allow the imposition in a take it or leave it, buried in the contract consumer transaction is wrong.
18
1) Make all arbitrations optional at the request of either involved party where frivolous forced arbitrations, or bad faith forced arbitrations carry criminal penalties.
2) Make arbitrations subject to judicial review at the request of either involved party.
3) Make all arbitrations public record.
4) Make judicially reviewed arbitrations case law.
This will
2) Make arbitrations subject to judicial review at the request of either involved party.
3) Make all arbitrations public record.
4) Make judicially reviewed arbitrations case law.
This will
2
Many people don't read the fine print that precludes arbitration, which they certainly should do, but others do read the fine print and for one reason or another must complete the contract. This is a step in the right direction. Even better than that would be a requirement that financial contracts be written in LARGE PRINT, with potential customers required to sign at various points (yeah, got that, ok, got that). This idea may seem to cater to lazy customers, but when you have to choose between lazy customers and greedy, corrupt financial institutions, it's probably better to come down on the side of customers. One more thing that would help, and this bureau isn't empowered to do that, would be indicting, convicting and imprisoning corporate swindlers.
3
In most cases, these arbitration clauses are buried in dozens or even hundreds of pages of boilerplate legalese under the benign heading Terms and Conditions as in, "Before we will let you through the front door to use or buy our service or product, you MUST agree to our Terms and Conditions.
Trying to opt out of this is just like the GOP's idiotic argument that individuals faced with a medical emergency can "negotiate" the best deals with their (voluminums) providers ranging from hospitals, doctors, and specialists, to anesthetists and x-ray technicians.
"Yes....I know I am losing so much blood I will die in the next four minutes, but let me call Doc Smith to see if he can give me a better rate on having my arm reattached."
Trying to opt out of this is just like the GOP's idiotic argument that individuals faced with a medical emergency can "negotiate" the best deals with their (voluminums) providers ranging from hospitals, doctors, and specialists, to anesthetists and x-ray technicians.
"Yes....I know I am losing so much blood I will die in the next four minutes, but let me call Doc Smith to see if he can give me a better rate on having my arm reattached."
2
That's the dream resolution - imprison the CEO of the criminally behaving corporation !
Hallelujah and amen!
Hallelujah and amen!
1
This is the perfect time to write letters to our representatives in Congress, telling them of our support for the Bureau and the right to bring class action lawsuits.
Real letters, on paper, delivered by mail, get far more attention than emails and online petitions.
I will be writing today. I will 'cc' the letter to the White House and to Director Cordray as well. I encourage you all to do the same.
Every day industry lobbyists buttonhole our representatives, sharing their concerns. You can be sure the banks are on a major lobbying push right now. If our representatives don't also hear from us then it's our fault if things go sour. This is a democracy. Speak up. Make your voice heard.
Pres. Trump
1600 Pennsylvania Ave NW
Washington, DC 20500
Richard Cordray, Director
Consumer Financial Protection Bureau
1625 Eye Street N.W.
Washington, D.C. 20006
Real letters, on paper, delivered by mail, get far more attention than emails and online petitions.
I will be writing today. I will 'cc' the letter to the White House and to Director Cordray as well. I encourage you all to do the same.
Every day industry lobbyists buttonhole our representatives, sharing their concerns. You can be sure the banks are on a major lobbying push right now. If our representatives don't also hear from us then it's our fault if things go sour. This is a democracy. Speak up. Make your voice heard.
Pres. Trump
1600 Pennsylvania Ave NW
Washington, DC 20500
Richard Cordray, Director
Consumer Financial Protection Bureau
1625 Eye Street N.W.
Washington, D.C. 20006
8
Oh-no. Poor CFPB. Did someone not inform them that the worst place to be is between Wall Street and its food-bowl?
I predict that Congress radically reforms or abolishes the CFPB before a year passes.
I predict that Congress radically reforms or abolishes the CFPB before a year passes.
3
In 1968-69 while I was a combat infantryman in Nam the University Branch of SeaFirst Bank illegally forfeited my student loans despite my having had my mother had deliver my orders each time I changed training bases and then my assignment to C 2/18th 1st Inf Div! The day I arrived home on 30 day extension of my 12 month tour leave I went straight to the University Branch to notify them of my combat extension and continued tour with my unit.
The bank manager laughed and said my 3.5% interest was lower than the current 5% so they had forfeited my loan since they were losing money on their investment.
He laughed again and said that they had received from the Feds full reimbursement for my loan and did not care. To this day I still have that over my credit ratings and have yet to receive my reenlistment bonuses. Despite retiring as a reservist at age 60 out of FT Bragg and several times having JAG sign off on my having an illegal forfeiture, social security is still drawing 25% off for repayment! And they say a federal judge had added a $5,000 penalty onto of the original ~$5 K and its interest over almost 40 years.
Bank of America has bought SeaFirst. Arbitration has yet to act. Thirty nine years and still collecting--despite federal law saying student and professional loans, given notification, cannot be forfeited.
Arbitration by financial institutions can be a bad joke.
The bank manager laughed and said my 3.5% interest was lower than the current 5% so they had forfeited my loan since they were losing money on their investment.
He laughed again and said that they had received from the Feds full reimbursement for my loan and did not care. To this day I still have that over my credit ratings and have yet to receive my reenlistment bonuses. Despite retiring as a reservist at age 60 out of FT Bragg and several times having JAG sign off on my having an illegal forfeiture, social security is still drawing 25% off for repayment! And they say a federal judge had added a $5,000 penalty onto of the original ~$5 K and its interest over almost 40 years.
Bank of America has bought SeaFirst. Arbitration has yet to act. Thirty nine years and still collecting--despite federal law saying student and professional loans, given notification, cannot be forfeited.
Arbitration by financial institutions can be a bad joke.
6
How many people really participate in class action lawsuits? As a frequent trader, I get notices of Class Action against companies whose stock I have traded very frequently, and toss them in the trash.
3
Dealbook meant to say: "US Consumers Could Gain Billions under New Rule".
4
For once, I'd like to see Trump and the GOP give an ounce of concern about the everyday, middle-class-to-poor American! Just once. I don't think these two evil, selfish entities are capable of caring about anyone but themselves (w the exception of Susan Collins and Dean Heller).
I hope they are held accountable for every single narcissistic, selfish act they do and that their funerals reflect their selfish, insecure hearts! I hope they suffer on their deathbeds as they remember their lack of compassion.
I hope they are held accountable for every single narcissistic, selfish act they do and that their funerals reflect their selfish, insecure hearts! I hope they suffer on their deathbeds as they remember their lack of compassion.
4
Whom do you think Trump is trying to help by trying to create and keep decently paying jobs in the US?? You need to expand your information sources.
Blue collar voters chose Trump for a reason. Neither democrats nor republicans have had the interests of middle-class-to-poor Americans in mind for a while. (Do you really believe Americans just above the subsidy level were helped by Obamacare??)
Blue collar voters chose Trump for a reason. Neither democrats nor republicans have had the interests of middle-class-to-poor Americans in mind for a while. (Do you really believe Americans just above the subsidy level were helped by Obamacare??)
1
Wow, this could be a prime consumer protection provided the right to sue was not abused by lawyers of questionable ethics.
4
Corporations nickel and dime us everywhere and like the judge said it's not worth it to keep fighting a $30 fee. Seems like this will improve accountability and good consumer business practices.
6
Since a consumer has maybe one arbitration case in a lifetime and banks will have several each day, any private arbiter that consistently finds for the consumer will find himself out of business. The system has a built in bias.
3
While I share the sentiments expressed here against arbitration, I will toot my horn for arbitration conducted by the Financial Industry Regulatory Authority (FINRA), which regulates stock brokers and employees in the industry. Eighty percent of the cases filed are settled or withdrawn and claimants win about 35-45% of the balance. And class actions are not covered by the arbitration clause, so they may be filed in court. The panel of arbitrators are drawn from all walks of life, are subject to challenge by the parties and must undergo a rigorous screening for conflicts of interest. A good system worth emulating.
1
So you think a 35-45% win rate, meaning FINRA wins 55-65% is good for consumers?
1
Yes. After you consider the settled matters, which you can assume include those in which the complainants had a strong case, 35% - 45% is a very attractive remainder from a consumer protection perspective.
First of all, the claimant doesn't file against FINRA, it files against the broker who sold it securities. Eighty percent of the claims result in a settlement, which means that combined with the cases that go to a hearing, almost 9 out of 10 result in some award to the complainant. If you could do as well in a casino, you could quite your day job.
1
I expect this issue is one of the largest motivations (after wanting to gut Dodd-Frank) for financial firms sponsoring congressmen and congresswomen. Whatever it costs the financial industry, it will have been money well-spent to have friends in congress who are sympathetic to the special problems of the industry and are willing to do something about it. I gather it will come down to a question of having enough courage to repay one's sponsors and take the heat from constituents.
3
Is it courage or cowardice??
Preserving people's right to obtain relief by banding together with fellow citizens who are similarly afflicted, instead of being forced into one-by-one arbitration against concentrated corporate power, is a concept of such eminent and self-evident common sense and fairness that Republican opposition to it was almost a foregone conclusion.
I think it's been evident for a long time whose interests that party "represents."
I think it's been evident for a long time whose interests that party "represents."
15
This is all fine and good. ( let's continue the culture to sue over everything )
Why do we continue to put the onus on individuals, instead of actually having firms\corporations\banks following guidelines, rules and laws which would put the onus back on them ?
There would be no reason to sue in the first place
Why do we continue to put the onus on individuals, instead of actually having firms\corporations\banks following guidelines, rules and laws which would put the onus back on them ?
There would be no reason to sue in the first place
8
Yes, everybody should follow the rules. In a perfect world, "the rules" would be clearly written and fairly understood by all parties.
Allowing class-action lawsuits instead of mandatory arbitration clauses is a crucial step toward that ideal. Has anyone who reads this actually READ all the "for full terms and conditions click here" buttons. Vendors don't even have to 'print' the "fine print."
Hurray, CFPB!!!
Allowing class-action lawsuits instead of mandatory arbitration clauses is a crucial step toward that ideal. Has anyone who reads this actually READ all the "for full terms and conditions click here" buttons. Vendors don't even have to 'print' the "fine print."
Hurray, CFPB!!!
4
@Phil
Aye, Don't get me wrong, I am all for more accountability through the courts ( as well as easier access ), but all I am saying is that we are continuously going through\dealing with the cycle of .... '' after the fact''
All I am saying mate. Thanks for the comment though,
Aye, Don't get me wrong, I am all for more accountability through the courts ( as well as easier access ), but all I am saying is that we are continuously going through\dealing with the cycle of .... '' after the fact''
All I am saying mate. Thanks for the comment though,
3
Big Business would prefer no regulation and no accountability through law suits. Cheat or harm anyone and have no consequences.
3
Interesting. Glad the Times is following this. The Trump administration and the Republican Congress seem hellbent on destroying consumer protections and promoting oligarchic rule. This country really is in danger, but not from terrorists. It is in danger from oligarchs who want to usurp democracy with their money.
13
"That reluctance is why one federal judge remarked in an opinion that “only a lunatic or a fanatic sues for $30.” "
This is the heart of it. If you can't bring a class-action, any lawsuit with damages too small to be worth litigating just becomes profit for the company. They know this, which is why they love arbitration so much. If you have a mandatory arbitration clause that's enforceable, you can be pretty sure that at least 90% of people won't bother if the amount you cheat them out of is less than $300 or so. But cheat all 5 million of your customers out of $300, and that's a huge profit. The class action is the only real way to stop these sorts of abuses - aside from effective consumer regulation, something the US has never been committed to having and paying for.
This is the heart of it. If you can't bring a class-action, any lawsuit with damages too small to be worth litigating just becomes profit for the company. They know this, which is why they love arbitration so much. If you have a mandatory arbitration clause that's enforceable, you can be pretty sure that at least 90% of people won't bother if the amount you cheat them out of is less than $300 or so. But cheat all 5 million of your customers out of $300, and that's a huge profit. The class action is the only real way to stop these sorts of abuses - aside from effective consumer regulation, something the US has never been committed to having and paying for.
50
We are being nickled and dimed to death in this country.
That is how enormous profits are made.
That is how enormous profits are made.
2
Good for big business and bad for little people????
Certainly nothing Republicans will advocate for.
This will be killed along with clean air, clean water, healthcare, renewable energy.
Government for and by troglodytes is what we've got.
Certainly nothing Republicans will advocate for.
This will be killed along with clean air, clean water, healthcare, renewable energy.
Government for and by troglodytes is what we've got.
5
Wait, is it April 1st?
4
This is huge
And great news
And great news
8
For crying out loud WHY did this article lead with the prospect of large losses on Wall Street rather than the fact that citizens, at least in one segment of the economy, stand to regain a fundamental right? Which is the most important story here? Come on NYT, you're better than this.
138
Was the article edited since you made your comment? The first paragraph I see leads with "The nation’s consumer watchdog adopted a rule on Monday that would pry open the courtroom doors for millions of Americans..."
1
or not...
NOT really. They've always been on the side of the banks. If any bank behaved honorably, they would have nothing to worry about. But banks and corporations are taking over our lives with the tacit approval of "liberal" news organization's like the NYTimes. I, for one, patronize small shops. Would love to get a real local paper that covers the news from both sides without an obvious slant where one can publish a letter that will. It be trolled.
About time.
6
The Consumer Financial Protection Bureau has been, by all accounts, highly aggressive under the Obama Administration. It has to stabilize into a "watch dog" rather than an "activist" on behalf of consumers.
That said, I really like this ruling; however, given the motivation of trial attorneys and the way awards are split, will this remain a measure to protect consumers or just wind up creating a grievance industry to generate a nice revenue stream for themselves?
That said, I really like this ruling; however, given the motivation of trial attorneys and the way awards are split, will this remain a measure to protect consumers or just wind up creating a grievance industry to generate a nice revenue stream for themselves?
4
Moving from lap dog regulators to watch dog regulators can seem to the industry like activists. On the other hand, industry would cry, like Trump about the press, that any restraints are unreasonable.
2
The issue isn't whether we need arbitration or class action lawsuits. I'm not a fan of lawyers or litigation, to be honest. But we need more documentation of what banks are doing or not doing. The secretiveness of the arbitration system is good for no-one. I don't think it even helps the banks, because it encourages them to hide their problems instead of solving them.
9
It's about time that logic prevails. The actions of mega-banks affect not only many individuals, but even whole economies and countries. In the case of the credit crisis, the actions of banks caused a global crisis. The notion that class actions are necessary to redress this problem.
9
The issue is not the specific rule but the creation of an agency that is run by zealots and beyond the control of the voter. The agency should not be allowed to be a rogue agency without oversight and a guaranteed budget. The result is over 1,600 new regulators and a current budget exceeding $600M.
1
Yeah, so?
Consumers benefit from those regulations, and are protected by them, as well.
The horror!
Consumers benefit from those regulations, and are protected by them, as well.
The horror!
4
Hallelujah! Just the kind of agency I like to see protecting my rights.
6
So consumers can be railroaded by corporate money getting politicians to sit up and beg? Regulations protect more than they harm and what's your budget deficit?
4
As a financial services,compliance consultant, and having implemented Dodd Frank procedural requirements for several firms, I can attest first hand the onerous mandates. However this portion of the regulations presents no significant expense to the ordinary course of business. Simply put, if firms generate revenues as a result of fraudulent business practices afflicted on the body of its customers, than those ill-begotten revenue streams are exposed to significant class action recourse. Two thumbs up. If financial services firms have no malicious agenda, why should they be threatened with this rule change? Additionally, if you're a Trump supporter, you should have every reason to expect the president to support this populist move.
13
You have my sympathy trying to comply with the tsunami of regulations that came out of the Obama Administration. A friend in compliance at a major financial services firm said oftentimes the regulators couldn't even answer questions about new regs and didn't even know how they were supposed to be implemented.
The regulations just kept coming, but no one in government thought about how they would actually be put into practice. (Reminiscent of Obamacare?)
The regulations just kept coming, but no one in government thought about how they would actually be put into practice. (Reminiscent of Obamacare?)
3
Your friend is spot on....In many of procedural implementations, its a fly-by-night approach. No visual and all instrumentation that you get from point A to Point B. And hopefully, those same regulators that don't understand elements of DF completely, approve of what you're doing all the same.
For four years I worked for one of the nation's largest arbitration administrators. I believed in alternative dispute resolution, particularly mediation, as a reasonable way for two reasonable parties to overcome costly and distracting conflicts. But it was expensive. And when it entered into condumer-related and, particularly, emplyment-related disputes, the system was heavily tilted in favor of corporations and employers. Make no mistake; behind the scenes, the corporations and the arbitrators are acutely aware of the advantage they possess and they wield it ruthlessly (there were some arbitrators whose first concern was fairness, to be sure). None of the people I worked with in those days will have anything to do with mandatory arbitration.
23
A rare bit of good news for consumers. Unfortunately, it appears that this rule change only applies to the financial industry, and not to other offenders that use forced arbitration, such as the communications giants. And while they're at it, maybe they overturn non-compete clauses, which basically chain workers to their employers.
18
If mandatory arbitration isn't unconstitutional it should be.
61
Excellent. This legislation was badly needed.
8
Most Americans still believe that, if all else fails, they can always have their day in court. Small print arbitration requirements have robbed consumers of due process protections and indemnified corporations against liability for fraud.
104
It's about time!!! Forced arbitration is nothing more than corporations castrating consumers and taking away their ability to seek just and fair rulings in disputes. The process is simply SHAMEFUL!
If a company produces a product that is reliable and of sound quality---what's to fear from the judicial system? Sadly, today, most product warranties are not worth the paper they are written on. The consumer is at the mercy of the producer.
If a company produces a product that is reliable and of sound quality---what's to fear from the judicial system? Sadly, today, most product warranties are not worth the paper they are written on. The consumer is at the mercy of the producer.
16
By using contracts of adhesion between parties of unequal bargaining power, these corporations leverage the hapless Consumer to contract away their constitutional right of trial by jury in civil actions.
This is the ideal situation for the state to step in to protect the consumer from such predatory conduct.
This is the ideal situation for the state to step in to protect the consumer from such predatory conduct.
7
Thank you for using the correct term, 'contracts of adhesion', which were unenforceable, here in mandatory arbitration, but which the Supreme Court in its infinite wisdom, in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), ruled 5 to 4 were indeed enforceable, ending class action suits and inflicting arbitration on, well, everyone for everything. The CFPB is of course doing the right thing, but, alas, it is only a matter of time until the Republican administration and eventually the Supreme Court again reinstates the enforceability of arbitration. As they say, elections have consequences.
Never give a sucker an even break. I find it a bit unclear about credit card companies use of the arcane 1925 rule as stated in this article, '..that formalized arbitration as a way for companies of EQUAL bargaining power to resolve corporate disputes'. The little guy or customer is not an equal to the corporate wealth so how does it actually apply?
We should not let Trump and the rest of his super wealthy cronies get away with removing the CFPB protections. They are stripping away all our protections, all in the name of corporate greed for themselves.
Trump and his Old Boy Network GOP want to remove consumer protections; de-regulate climate control protections; drop healthcare for 24-33 million Americans while making insurance premiums unaffordable for the rest; virtually eliminate Pell grants; drop funding for the arts and sciences; drop funding for scientific research in our medical fields; stop Meals on Wheels; stop legal aid for the poor; silence PBS; silence our media; ridicule and denigrate our U.S. intelligence community who are protecting our national security in lieu of Trump; violate our Constitutional laws; demolish our democracy; isolate America from its allies; and completely trash its former reputation as world leader.
I may have left some awfulness under Trump out, the list is long and growing, but the upshot is that he is NO president of the American people and needs to be removed from office.
We should not let Trump and the rest of his super wealthy cronies get away with removing the CFPB protections. They are stripping away all our protections, all in the name of corporate greed for themselves.
Trump and his Old Boy Network GOP want to remove consumer protections; de-regulate climate control protections; drop healthcare for 24-33 million Americans while making insurance premiums unaffordable for the rest; virtually eliminate Pell grants; drop funding for the arts and sciences; drop funding for scientific research in our medical fields; stop Meals on Wheels; stop legal aid for the poor; silence PBS; silence our media; ridicule and denigrate our U.S. intelligence community who are protecting our national security in lieu of Trump; violate our Constitutional laws; demolish our democracy; isolate America from its allies; and completely trash its former reputation as world leader.
I may have left some awfulness under Trump out, the list is long and growing, but the upshot is that he is NO president of the American people and needs to be removed from office.
11
Unfortunately, Pence would be worse because he's marginally more competent than Trump and an even more dogmatic far-right fundamentalist.
1
We'll remove Pence, too.
1
Corporations deserve no place in the process of politics and governance.
6
No wonder republicans hate Elizabeth Warren, Richard Cordray and the CFPB. Together, they actually protect defrauded citizens. Jeb Hensarling, (R) TX and darling of the banks, on the other hand, not so much
12
Wall Street is corrupt and there needs to be a mechanism in place to protect consumers. Nothing like the threat of a potential lawsuit to make thieves into honest men (and women).
4
Banks and financial parasites have been violating American's 7th amendment constitutional right to a jury for a long time, and for decades have succeeded without much push back from the media, or even Democrats, really. The banks, corporations, and Chamber of Commerce have Americans focused on gun rights instead of their rights to justice in a courtroom administered by their peers.
The federal courts have been mostly complicit too. It's about time someone did something. Congratulations to the CFPB!
The federal courts have been mostly complicit too. It's about time someone did something. Congratulations to the CFPB!
8
Just a minor observation, but I loved this:
"In the debate about arbitration, those assertions were almost entirely anecdotal. There is no federal database that tracks arbitrations and the process is entirely secretive.
"To get beyond the anecdotal, The New York Times assembled its own database of arbitrations in a series of articles in 2015 that showed few people ever go to arbitration."
Anecdotal evidence is the worst kind of evidence yet journalists often rely on it exclusively without providing any kind of qualification. Kudos to the Times for putting in the effort to get hard numbers and empirical proof.
"In the debate about arbitration, those assertions were almost entirely anecdotal. There is no federal database that tracks arbitrations and the process is entirely secretive.
"To get beyond the anecdotal, The New York Times assembled its own database of arbitrations in a series of articles in 2015 that showed few people ever go to arbitration."
Anecdotal evidence is the worst kind of evidence yet journalists often rely on it exclusively without providing any kind of qualification. Kudos to the Times for putting in the effort to get hard numbers and empirical proof.
6
It is important to ensure that the public is protected from firms that deceive them. On the other hand, it is important to ensure that law firms not take advantage of the law. Changing the law to award no more than $10 million above the cost of expenses to law firms and having the remainder of the money awarded to wronged consumers makes sense.
This is an excellent article but it leaves out the most important step in the process by which consumer rights have been crushed. In 2015, in the case DIRECT TV, the Supreme Court upheld clauses in sales contracts that require the purchaser to waive his or her right to bring an arbitration on a class wide basis. Arbitration would not be a problem if consumers could band together to arbitrate as a class. But the Supreme Court has allowed the sellers to require the purchaser to waive any class wide arbitration. That is an example of how a five to four conservative Court favors corporations.
5
Forced arbitration is one of the greatest thefts of citizens’ rights in the history of the USA. In theory, if arbitration worked fairly, it would have a legitimate role –although it still should only be used when truly a mutually ‘opt in’ situation. Instead, from personal experience, I know that arbitration panels are ‘stacked’ in the favor of business often to a grotesque level. If Congress really cared about citizens it would reinstate the right to a fair trial, which includes class action suits -to have the resources needed to go after the largest abusers. Abuse by class action lawyers, which is also a real issue, could be better addressed with reasonable limits on when they can be used and the percentages of ‘winnings’ lawyers can collect -versus the outright banning of its use in many sectors.
6
The business model of Wall St is fraud. This is one step in making that model a little bit harder to run.
15
The con man is the American archetype. I was reading an account of the War of 1812, a US effort to drag Canada into US, and most battles involved looting by the Americans such that the their virtual brothers along the border became fed up and wanted no part of the US when at the beginnings no they were indifferent.
One ultimately pro- Brit clergyman upon arriving in NY, went to court and became disgusted as every case and involved some kind of swindle.
America: land of the swindle- land fraud, "supplements," "investment grade" diamonds, bee pollen, relentless con jobs on the elderly (remember McCain & the Keating 5- S&L bond fraud) and on.
One ultimately pro- Brit clergyman upon arriving in NY, went to court and became disgusted as every case and involved some kind of swindle.
America: land of the swindle- land fraud, "supplements," "investment grade" diamonds, bee pollen, relentless con jobs on the elderly (remember McCain & the Keating 5- S&L bond fraud) and on.
I think the consumer financial protection bureau is a lovely thing. I do have questions about its constitutionality though. Shouldn't, by our constitution, the president have control over the executive powers asserted by this agency?
That's all to say that either it is an agency that needs to be dismantled, as per the constitution, or its existence is a practical admission that corporations hold more power than the presidency.
That's all to say that either it is an agency that needs to be dismantled, as per the constitution, or its existence is a practical admission that corporations hold more power than the presidency.
2
There are other parts of the federal government designed to be independent of any current executive regime. The Federal Reserve comes immediately to mind.
3
If the Republicans in control of the Federal Government block this rule, as Trump blocked the nursing home rule, how is it possible for them to successfully claim to represent ordinary people? It's possible because they are counting on most people not paying attention to this issue, and rather to pay attention to vague bluster (make America Great Again), racial dog whistles, and other emotional triggers like anti-trans disgust and xenophobia. My problem with Dems saying we have to abandon ID politics is that the Right is not abandoning it: they use it to hide their class warfare.
We all accept the credit card companies' scamming fine print. Who among us refuses credit, or refuses to use Microsoft, Apple, or Google products with similar clauses? You'd have to drop out of modern life to do that. The Republicans want many people to live pre-modern lives without health insurance, but very modern lives with clauses and other ways of tilting the markets for the rich, for stockholders. They do this by demonizing Medicaid recipients, as if most of them were shiftless minorities (according to them).
On the left we see Trump and can't believe people bought & buy his scam, but this scam of pushing buttons and then sending wealth upward in the name of "liberty" is much older than that. Reagan did it a lot. "States rights" in defense of Jim Crow is older that that. The trick is always to invoke freedom and then do a reverse Robin Hood, hurting white, black, and all ordinary people.
We all accept the credit card companies' scamming fine print. Who among us refuses credit, or refuses to use Microsoft, Apple, or Google products with similar clauses? You'd have to drop out of modern life to do that. The Republicans want many people to live pre-modern lives without health insurance, but very modern lives with clauses and other ways of tilting the markets for the rich, for stockholders. They do this by demonizing Medicaid recipients, as if most of them were shiftless minorities (according to them).
On the left we see Trump and can't believe people bought & buy his scam, but this scam of pushing buttons and then sending wealth upward in the name of "liberty" is much older than that. Reagan did it a lot. "States rights" in defense of Jim Crow is older that that. The trick is always to invoke freedom and then do a reverse Robin Hood, hurting white, black, and all ordinary people.
9
Sounds like a win for "We, the [little] people." It's hard to beat big business. As the article states, results are "dismal." This is what Dodd-Frank and the CFPB are supposed to do. I don't want frivolous lawsuits either -- that is also a waste of taxpayers' dollars. However, it's time for the consumer to be protected rather than our bailing out the wealthiest among us.
6
I'm a strong admirer of a certain consumer watchdog (magazine hint hint) and suggest that this is one tiny speck of good news in an other nightmare year for the average American.
Like many other commentators, I won't hold my breath on this one.
This will be killed off by a hidden amendment in some obscure legislation the nuts in Congress try to approve on take out the trash day.
Like many other commentators, I won't hold my breath on this one.
This will be killed off by a hidden amendment in some obscure legislation the nuts in Congress try to approve on take out the trash day.
8
Good.
4
Shameful. Trump supports nursing home abuse and neglect.
Of course taxpayers will pay. People will be injured by careless or understaffed nursing homes and end up in hospitals. Taxpayers will pay via Medicare and Medicaid instead of getting the money back through Medicare and Medicaid liens.
Of course taxpayers will pay. People will be injured by careless or understaffed nursing homes and end up in hospitals. Taxpayers will pay via Medicare and Medicaid instead of getting the money back through Medicare and Medicaid liens.
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The way it works is that nursing homes that have acted egregiously are sued by victims. If they prevail or settle the U S government gets back all the medical expenses it incurred because of the nursing home's wrongful acts. I guess the US government does not want this money. A big boon to nursing home operateors.
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Why does this article prominently quote Mr. Kaplinsky's patently false statement about the loss of the "benefits of arbitration" to consumers? First of all, arbitration is obviously meant to benefit corporations, not consumers. Second, consumers are still free to "choose" arbitration if they want to - the rule only ends the practice of "forced" arbitration - and only for class actions.
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The reason after-market auto parts are safe is that the insurance companies rule the industry with iron fists. They send spies into factories. They chat up workers at the coffee truck. They hunt down corner-cutters and potential manufacturers of dangerous, e.g., brake-fluid pistons, fuel pumps, or other bits and pieces that could kill you if they weren't made properly.
You can't get into the auto parts business if you can't satisfy some liability insurance company that you know what you're doing.
What makes this cheap, efficient, and effective enforcement of safety and good sense possible? The threat of class action law suits.
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Let's see, it's the Consumer Financial Protection Bureau vs. big banks. Gosh, I wonder how this one is going to turn out. Raise your hand if you think the Republican controlled congress will let the bureau's rule stay on the books. And for those of you with your hand raised, I have bridge in Brooklyn I'd like to sell you. Cheap.
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Surprise, surprise. And bravo. Is Richard Cordray a Trump appointee? If so, how could a Trump appointee in this consumer protection agency have supported this consumer oriented policy? Is this a show of independence? This consumer protection agency may show more teeth under Trump than under Obama after all... !! Now things are getting interesting.
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No, of course he's an Obama appointee. His agency wouldn't even exist if it weren't for Elizabeth Warren.
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Cordray was appointed by Obama.
I can't believe that has to be pointed out.
I can't believe that has to be pointed out.
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I have no doubt Trump's Kommisariat For Regulation Of The Administrative State will remove this defense of consumers asap.
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Let's see, regular citizens' interests versus corporate citizens' interests. Any bets on how this will play out in Congress?
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These forced agreements are as I understand it Contracts of Adhesion. The individual presented with them has no other choice but to agree. They're impossible to read, understand or negotiate. Some protection for the institution is understandable in some situations, but not all. When I go kayaking or ocean swimming in an organized event we all willingly sign what we jokingly call 'the suicide pact' If I drown during a swimming event I've acknowledged that I knew what I was getting into. Trying to find out what new nonsense Experian has done to me requires agreeing agreeing .... A lawyer warned that I'm basically agreeing to hold them blameless for continuing to screw up my credit rating. What also doesn't work is when a law firm files a class action suit over some problem that affects consumers they make millions while the consumer gets offered a couple of dollars. Either the problem should be fixed, wholly compensated for or a simple apology made.
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If I was an odds-maker, I would give this rule the proverbial "snowflake's chance in hell." No way, nohow this thing survives a Republican Congress. Gimme a break.
7
I think it would be much better if each individual was allowed to litigate his own case in small claims court. In class action suits, 90% of the money goes to lawyers who organize the suits.
Not willing to sue for $30 plus court costs? That's up to you, but some people do, and then win and keep their full damages.
Not willing to sue for $30 plus court costs? That's up to you, but some people do, and then win and keep their full damages.
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Small claims court is largely used by corporations to dun people for debt. It's funded by the taxpayers but it primarily issues court judgement ordering consumers to pay up. Hospitals are among the chief plaintiffs and many small law firms exist entirely on these proceedings.
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@Mebster - True, but so what? You can sue large corporations in small claims court, it's not very difficult. My brother won $4500 plus costs from Chevrolet in a warranty dispute.
I just got a check for $2.18 from a class-action lawsuit. These are the dumbest things ever and exist only for the enrichment of lawyers.
2
In some cases they do only exist for the enrichment of lawyers. These are the lawsuits that give the legal profession a bad name and a few Texas law firms all their wealth. But in cases of significant and broad harm caused by the actions of financial institutions or other corporations, they present an opportunity not only for recovery for victims but also punitive damages against the offenders.
In these cases the damages are large enough that attorneys may get one-third of judgments.
In these cases the damages are large enough that attorneys may get one-third of judgments.
4
That $2.18 may not be much to you but multiplied by enough people it is enough to make a company think twice before ripping you off or selling you something unsafe because they know they are highly likely to be able to get away with it, since no one individual (unless very rich and with a grudge) will ever be able to afford to take them on and if they try it will be in a very biased arbitration system.
7
The article overlooks a key problem with this regulatory effort which is the federal courts. While the Consumer Financial Protection Board can promulgate whatever rules it desires, like any agency, it cannot contradict federal legislation. Since 1925, the Federal Arbitration Act has endorsed parties' right to select arbitration to resolve finally their disputes. In a series of decisions over the past three decades, the Supreme Court has upheld the FAA from a variety of challenges including state consumer regulation. Even if Congress fails to overrule the CFPC's action, the issue seems inevitably headed to federal courts that have embraced the FAA and protected it against all challenges.
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It doesn't mention it, but I believe you overstate the impact of the Federal Arbitration Act. If the CFPB's regulation is pursuant to its power under Dodd-Frank and there is a conflict, Dodd-Frank would supersede the FAA as it's more recent legislation.
Someone's about to lose their job here.
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Sure. Let's see it happen, before we celebrate. Call me cynical, but this is just too good for average people, for the GOP to allow. There will be
" problems". Just wait.
" problems". Just wait.
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"The Chamber of Commerce and other pro-business groups have belittled the rule as nothing more than a gift to class-action lawyers, who tend to be Democratic donors."
GOP statements to this effect might seem more genuine if people were made meaningfully aware of the existence AND nature of the arbitration clauses many companies wish to enforce. As it is, arbitration is the very last thing companies bring up with potential customers. In particular, credit card companies and banks are infamous for their seemingly unstoppable avalanche of unsolicited mailings, but only a close reading of the contracts would reveal the existence of these clauses. Even then, it is no insult to the general populace to say that the consequences of such clauses may not be immediately apparent. Generally, people reasonably expect that the courts are open to them.
At a broader level, it is easy to find an increasing number of arbitration clauses buried in unlikely places and seeking to prevent even grievously injured parties from banding together or going to court. My personal favorite was when General Mill's attempted to make "Liking" its cereals a legally binding consent to arbitration and waiver of class action. Fortunately, they experienced the appropriate backlash. My point is that limiting the ability to rope unwitting customers into arbitration clauses seems like a legitimate effort to protect consumers at this point.
GOP statements to this effect might seem more genuine if people were made meaningfully aware of the existence AND nature of the arbitration clauses many companies wish to enforce. As it is, arbitration is the very last thing companies bring up with potential customers. In particular, credit card companies and banks are infamous for their seemingly unstoppable avalanche of unsolicited mailings, but only a close reading of the contracts would reveal the existence of these clauses. Even then, it is no insult to the general populace to say that the consequences of such clauses may not be immediately apparent. Generally, people reasonably expect that the courts are open to them.
At a broader level, it is easy to find an increasing number of arbitration clauses buried in unlikely places and seeking to prevent even grievously injured parties from banding together or going to court. My personal favorite was when General Mill's attempted to make "Liking" its cereals a legally binding consent to arbitration and waiver of class action. Fortunately, they experienced the appropriate backlash. My point is that limiting the ability to rope unwitting customers into arbitration clauses seems like a legitimate effort to protect consumers at this point.
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A "loss to consumers of the benefits of arbitration". I wonder if he said that with a straight face. Consumers get absolutely no benefit from arbitration. Only corporations benefit from it. If it was actually beneficial to consumers they could always agree to arbitrate after the dispute arises but that is not how it is set up; instead it is forced on consumers by the stronger party. Whenever one party seeks to force their will you can be sure it is to the benefit of that party alone.
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Nothing shows the need for class action more than the Wells Fargo fraudulent accounts setup. But I am sure that they claim the contracts, that no customer actually signed, covers arbitration only.
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Encouraging arbitration is fine and sensible. But it's the back door to preclude class action lawsuits that is the problem. Let's just provide that arbitration rules must permit claims to be aggregated into something like a class action.
4
The GOP will torpedo this h
just as they have torpedoed every other Bill or regulation designed to protect the public from corporate predators.
Just look at Trump, their leader and chief predator.
just as they have torpedoed every other Bill or regulation designed to protect the public from corporate predators.
Just look at Trump, their leader and chief predator.
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As a result of reading an article about arbitration in this newspaper about a year or two ago, I refused arbitration with my bank at that time. Having done business with this large bank for 40 years, its suddenly wanted me to submit to arbitration. The Times article couldn't have come at a better time for me.
Yet in this Age of Trump, it's hard for me to believe that this blow against arbitration will stand.
Yet in this Age of Trump, it's hard for me to believe that this blow against arbitration will stand.
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Kaplinsky was most likely the architect of the arbitration scheme. As it turned out, the preferred arbitrators in the credit agreements had links to the consumer credit industry, which was discovered after some state AGs did some investigations and filed suits. So it was fair, but only to the lenders, not the borrowers. This rule will not survive the current administration's phony pro "common man" propaganda.
3
The proliferation of arbitration is insidious and everywhere. Read the fine print on any end-user license agreement, or just about *any* contract an individual signs against a lawyered-up entity means that doing business with anything from a hospital ER to a rental agency requires signing a clause that effectively strips you of legal rights. As noted in the article, the original purpose "for companies of equal bargaining power to resolve corporate disputes" has been grotesquely twisted to apply to a profoundly unequal bargaining relationship between the individual consumer and the multi-million /billion dollar corporate entity.
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of course the Trump administration wants to prevent anything that will curtail stealing from the public. Look at the President himself--the poster children for this kind of practice. The thuggish GOP legislators will kill this, just as they have killed every other regulation designed to protect the public from corporate predators.
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Perhaps if the arbitration process were seen to be fair to everybody this sort of thing wouldn't be happening. But look at who is lining up on each side, who has the money, and give proper weight to the arguments about fairness, etc. Finally, look at which side the Trump administration is backing. They never met a rich and powerful person or company they didn't like.
14
It's about time these Arbitration clauses are finally being looked at.
13
Finally, some GOOD news coming out of Washington!
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Don't hold your breath. "...but lawmakers will face pressure to block it."
2
Elizabeth Warren--the gift that keeps on giving.
Me thinks GOP congress/Trump admin will get pressured by Wall St to shut this down.
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To Mr Kaplinsky, a lawyer considered the father of the arbitration clause, it is a faster and more efficient way to resolve legal disputes. I guess if you take away peoples right to sue then it is faster and more efficient, for the companies. The blatant disregard of the public by both corporations and our elected officials is disgusting and the fact that we the people continue to let them chip away at all of our rights for their own benefit is equally so.
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Amen, Chair, Amen! Preaching the truth!
Why a "blow against Wall St" - if they follow the rules they should have noting to fear. Putting them out of reach of the courts does not foster the rule of law. We all have to play by the rules and need to be held accountable.
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So, now it will be more difficult for companies to cheat and steal from employees and customers. Our president Trump will promptly fix this just as soon as he is assured increased climate change is progressing as planned.
58
As the article points out, the gains for consumers are not just the small monetary awards. Future consumers benefit because companies are more likely to think twice about engaging in questionable business practices.
200
If I stiff the bank or credit card company will they require me to come to arbitration (how?) or will they sue me? Just wondering.
5
I have been subject to dozens of arbitration clauses in my small business practice and in the consumer world. These clauses are crafted to benefit the company writing the contracts-the idea they are neutral is spin. Many companies I deal with specify I will have to agree to the arbitration group they choose at their corporate headquarters, which is usually some PO box in Delaware-regardless of their physical location. I would have to show up in Delaware for any arbitration and I would have to file it with their choice of arbitration group.
I have always believed, be it a consumer issue or a business issue, we all have a constitutional right to take a legal issue to an unbiased court and jury in the jurisdiction the alleged crime took place. Arbitration is an end run by business around the Constitution.
Those who say court cases are too expensive miss the point of JUSTICE. Justice has been undermined and there is no price you can put on that. Justice is a right, not a cost to business.
I have always believed, be it a consumer issue or a business issue, we all have a constitutional right to take a legal issue to an unbiased court and jury in the jurisdiction the alleged crime took place. Arbitration is an end run by business around the Constitution.
Those who say court cases are too expensive miss the point of JUSTICE. Justice has been undermined and there is no price you can put on that. Justice is a right, not a cost to business.
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Arbitration gives all advantages to big business and damages everyone else. It is very anti consumer and anti-American, in terms of what America used to stand for under the constitution.
The majority of us need to understand that it is better to trust government and courts than big business. The wealthy who run America, and control corporations, have convinced the average American, especially the poorly educated, that deregulation is good for them. IT IS NOT!
Regulations like giving the public the right to sue big business helps the consumer and small business person in fighting the super corporations which are largely monopolists in behavior and who have become the Monarchy of the USA, with all of the abuses that implies.
The majority of us need to understand that it is better to trust government and courts than big business. The wealthy who run America, and control corporations, have convinced the average American, especially the poorly educated, that deregulation is good for them. IT IS NOT!
Regulations like giving the public the right to sue big business helps the consumer and small business person in fighting the super corporations which are largely monopolists in behavior and who have become the Monarchy of the USA, with all of the abuses that implies.
1
Yes Big Money lackeys (i.e. republicans) where is the "choice" and "freedom" in being forced into arbitration?
Arbitration (selected from a menu of recognizably neutral arbitrators) should be an option not a requirement.
Arbitration (selected from a menu of recognizably neutral arbitrators) should be an option not a requirement.
"...monkeying" ? with checking accounts by banks? Perhaps just bit more than that. Then again, the arbitration clause makes monkeys out of bank customers so maybe it is appropriate after all. And all the GOP members (make that donkeys) in congress need is a carrot on a stick- to stick it to bank customers. By the way, did the Obama or Trump administration AG's criminally prosecute anyone and send them to jail? Thought not. Who would bring them carrots? I can see Eric Holder n his garden now.
2
Unlike the citizens of Kentucky and West Virginia many of us are interested in protecting the rights of the little guy and arbitration does not work.
So the voters of the red states may hoot and holler for government protecting big corporations like Trump-world but the rest of us need to be a counter balance
Arbitration is a rigged system.
So the voters of the red states may hoot and holler for government protecting big corporations like Trump-world but the rest of us need to be a counter balance
Arbitration is a rigged system.
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Don't forget that "class action" suits have a habit of draining the defendants of "large" settlement amounts that somehow turn into a mere $1.99 for each member of the class (after lawyers fees, of course).
1
This all sounds great, but at the end of the day this added cost of doing business will surely be passed back onto consumers. I know I'll get raked over the coals here for this, but we end up spending hundreds of billions feeding the trial lawyers and it is far from clear that consumers gain any benefits after factoring in the added costs.
1
Maybe this will keep businesses from doing business in a shady way to begin with, no?
73
We also spend untold millions subsidizing lawsuits between the rich and powerful. Compare the court fees they pay to salaries and overhead paid with taxes. Our Discovery laws only prolong the discovery of evidence precisely in order to put litigation out of reach for consumers generally and encourage these threats of bankruptcy to plaintiffs. Arbitration often amounts to a kangaroo court conducted by a "lawyer in robes." It's an easy paycheck for a corrupt profession, easily passed onto consumers.
For children being bullied at school, for example, millions of public funds defend incompetent teachers and their negligent administrators to frustrate due process. A similar process obtains through these clauses in financial contracts, especially as their subpoenas cost thousands to enforce--and THEN you have to prove "intent" -- in addition to the fact of fraud. Guess how long that argument takes!
The article states that virtually all contracts for credit cards contain these clauses. I recall someone insisting the "system is rigged" not long ago; well, here's the rigging, plain and simple. Meanwhile Republicans pivot from incomprehensible credit contracts to the cry for "greater choice" in "exchanges"-- so that health insurers can join in the feeding frenzy, contributing nothing to the delivery of professional services.
For children being bullied at school, for example, millions of public funds defend incompetent teachers and their negligent administrators to frustrate due process. A similar process obtains through these clauses in financial contracts, especially as their subpoenas cost thousands to enforce--and THEN you have to prove "intent" -- in addition to the fact of fraud. Guess how long that argument takes!
The article states that virtually all contracts for credit cards contain these clauses. I recall someone insisting the "system is rigged" not long ago; well, here's the rigging, plain and simple. Meanwhile Republicans pivot from incomprehensible credit contracts to the cry for "greater choice" in "exchanges"-- so that health insurers can join in the feeding frenzy, contributing nothing to the delivery of professional services.
11
It's not the cost of doing business that will increase, it is the cost of engaging in fraud and deceptive business practices that will increase.
25