Senator called on CFPB to eliminate unfair limits on corporate accountability in letter earlier this year
[WASHINGTON, DC] – U.S. Senator Richard Blumenthal (D-Conn.), member of the Senate Judiciary Committee and Ranking Member of the Commerce Subcommittee on Consumer Protection, issued the following statement today after the Consumer Financial Protection Bureau (CFPB) announced a proposed rule to that will curb the use of forced arbitration clauses:
“Consumers’ right to seek remedies through the court system for poor service, hidden or excessive fees, and other forms of exploitation is absolutely fundamental. Through the use and abuse of forced arbitration clauses, large financial institution have attempted to squash this right, denying millions of Americans the chance to seek justice. These clauses have one purpose and one purpose only: to stop consumers from holding their financial institutions accountable. I have long fought to end the use of forced arbitration in every sector of the economy, and I applaud the CFPB’s efforts to limit the use of this practice in financial contracts – an initial but crucially important step.”
Last week, Blumenthal introduced the Justice for Telecommunications Consumers Act, which would invalidate mandatory arbitration clauses and boost accountability in the telecommunications industry. Many telecommunications service contracts include mandatory predispute arbitration agreements, which eliminate consumers’ ability to file class action lawsuits and hold corporations accountable. This legislation would invalidate these agreements and protect the right of consumers to sue a corporation for wrongdoing.
In May, Blumenthal led a letter with Senator Al Franken (D-Minn.) urging the CFPB to undertake rulemaking to eliminate use of forced arbitration clauses and is an original co-sponsor of the Arbitration Fairness Act of 2015 (S.1133), which would ban all forced arbitration agreements so far as they impact employment, consumer, antitrust, or civil rights disputes.