Warner joins call to CFPB to limit arbitration agreements in financial contracts
U.S. Sen. Mark R. Warner (D-Va.), a member of the Senate Banking Committee, joined a group of nearly 40 Democratic senators in calling on the nation’s top consumer advocacy agency to quickly finalize an important proposal to limit the use forced arbitration in contracts that Americans sign when they need to take out an auto loan, sign up for a checking account, or pay for college.
Forced arbitration clauses are agreements that large corporations often slip into the fine print of contracts that Americans sign every day, and they have big consequences. By restricting access to the court system, these clauses prevent consumers who have been wronged from seeking meaningful legal recourse.
Over the past year, the Consumer Financial Protection Bureau (CFPB) has been working on a new rule to limit forced arbitration in financial services contracts—things like credit cards, checking accounts, payday loans, and private student loans. Today, the broad group of Senators threw their support behind the proposed rule and called for it to be finalized as quickly as possible.
“Every day, Americans across the country are forced to sign away their constitutional right to access the courts as a condition of purchasing common products and services like credit cards, checking accounts, and private student loans,” wrote the senators. “To restore Americans’ access to justice and hold financial institutions accountable, we strongly support the CFPB’s proposal to preserve the ability of consumers to band together in class actions when seeking relief through the civil justice system.”
Warner has been a strong proponent of consumer protections in the banking industry, previously urging the CFPB to require banks to offer better consumer protections for prepaid card users, including formerly incarcerated individuals who are provided prepaid cards with the money they earned or saved upon their release.
A copy of this letter, which was led by Senate Minority Leader Harry Reid (D-Nev.), U.S. Sen. Al Franken (D-Minn.), and U.S. Sens. Patrick Leahy (D-Vt.) and Sherrod Brown (D-Ohio), can be found here.