Grassroots groups say individuals need “power in numbers to level the legal playing field”
Press Release – DENVER – Today, more than 100 U.S. senators and representatives sent letters to the Consumer Financial Protection Bureau (CFPB), applauding the agency’s proposed rule to restore consumers’ right to join together to hold corporations accountable when they break the law. The rule would limit the financial industry’s use of an abusive practice in which they bury “forced arbitration” clauses in the fine print of take-it-or-leave-it contracts to block consumers from challenging predatory practices such as hidden fees, fraud and other illegal behavior.
The Colorado Consumer Protection Coalition, a coalition of Colorado non-profit organizations, is supporting these congressional efforts and other local actions. Ten organizations have signed onto a letter in support of the CFPB rule, making it one of the strongest showings of state support in the country.
“People of color and families with low incomes are particularly dis-empowered when big business takes away people’s right to join together to take legal action in court,” said Sondra Young, NAACP Denver Branch President. “An unjustified $8 fee here or a $2 checking account charge there is unlikely to be challenged by individuals given the realities of families, work and busy lives. Still, these fees and overcharges add up – and corporations profit at the expense of families and communities.”
“There’s power in numbers, and we need that to begin to level the legal playing field,” said Christine Alonzo, Executive Director of CLLARO, the Colorado Latino Leadership, Advocacy & Research Organization. “Currently banks, predatory “pay-day” lenders, credit card and cell phone companies, car dealers and many other businesses get to decide who will arbitrate or judge the case, what rules apply, and how much it will cost people. And there’s no real opportunity to appeal a bad decision.”
The Senate letter, signed by Colorado Senator Michael Bennet (D-Colo.) and led by Senate Minority Leader Harry Reid (D-Nev.), Senators Al Franken (D-Minn.), Patrick Leahy (D-Vt.) and Sherrod Brown (D-Ohio), stressed that forced arbitration “shields corporations from accountability for abusive, anti-consumer practices, which only encourages unscrupulous business practices by allowing violations of the law to go unchecked…at the expense of consumers, small businesses, and—just as importantly—law abiding businesses.”
The 38 Senators went on to “commend the CFPB for its comprehensive study and for carefully considering extensive public input before issuing its final proposal.”
The House of Representatives letter, spearheaded by Representatives Maxine Waters (D-Calif.), Hank Johnson (D-Ga.), and John Conyers (D-Mich.), hailed the rule as “a critical step to protect the public interest by ensuring that consumers receive redress for systemic unlawful conduct.”
The 65 representatives, including Colorado Representatives Diana DeGette (D-Denver) and Ed Perlmutter (D-Arvada), concluded that the Bureau’s “comprehensive study on forced arbitration unequivocally demonstrates that the proposed rule is necessary to the public interest and consumer welfare.”
These letters add to the broad support the CFPB’s proposed rule has already received. In April, 164 organizations that advocate on behalf of consumers, students, civil rights, labor, small business and more – led by Americans For Financial Reform (AFR) and Public Citizen – sent a letter to the CFPB urging the agency to act on its Congressional authority to restrict forced arbitration. The rule is open to public comment through August 22nd.
