In a letter sent to the CFPB Wednesday, more than 160 organizations applauded the agency for weighing a proposal to prevent companies from using arbitration clauses to block consumers from bringing class actions. But the groups, including the AFL-CIO and Service Employees International Union, urged the bureau to take the proposal a step further and also prohibit forced arbitration in individual cases.
The organizations blamed forced arbitration for shutting consumers out of the courts and “giving lenders an effective license to steal,” citing a study on arbitration agreements released by the bureau last year. The letter was delivered on the five-year anniversary of the landmark AT&T Mobility v. Concepcion decision, in which the U.S. Supreme Court ruled that businesses with class action waivers can force consumers to bring claims only in individual arbitrations.
The bureau is expected to formally propose the rule in Albuquerque next week during a field hearing on arbitration.
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