Public Citizen was instrumental in getting language limiting forced arbitration put in the Wall Street reform bills in the House and Senate. The language authorizes the new Consumer Financial Protection Bureau to ban forced arbitration clauses in consumer contracts with financial services providers like banks, credit card companies, payday lenders and mortgage lenders. Similar language is now being used by the Securities and Exchange Commission.
Because the House and Senate bills have similar provisions on forced arbitration, there is every reason to expect that they will be included in the final bill that President Obama signs into law. Hopefully there won’t be eleventh-hour attempts by the big banks and the U.S. Chamber of Commerce to strip the provisions. So far it appears Public Citizen has won a major battle in this war.
In a related development, the U.S. Supreme Court granted certiorari last week in AT&T Mobility v. Concepcion. In this case, the Court will decide whether lower courts can continue to strike down class-action bans as unfair. AT&T argues that the Federal Arbitration Act preempts such rulings. Public Citizen Litigation Group represents the Plaintiff and will argue before the Supreme Court – for the 57th time in its history – this fall. This case could preserve or sharply limit corporations’ use of class-action bans in consumer and employment contracts.
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