Rep. Johnson calls on Consumer Financial Protection Bureau to issue ‘strong rule” to prohibit forced arbitration in financial services, products

WASHINGTON, D.C. – Today, U.S. Rep. Hank Johnson (D-GA), along with U.S. Sen. Al Franken (D-MN), applauded the Consumer Financial Protection Bureau (CFPB) for its strong stance against forced arbitration in its second study on forced arbitration agreements in consumer financial services and products. CFPB director Richard Cordray is scheduled to speak at a field hearing on the topic starting at 11 a.m. in Newark, N.J., where consumers will get a chance to share their experiences with arbitration.

“Beyond all doubt, forced arbitration creates a discriminatory and unjust system that pales in comparison to the courts,” said Johnson, who since 2007 has introduced the Arbitration Fairness Act that would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to choose arbitration after a dispute occurred. 

“I am encouraged by the recent study by the Consumer Financial Protection Bureau (CFPB), which has amply proven that forced arbitration closes the courthouse doors to millions of consumers, shielding corporations from accountability while undermining our civil justice system.  As the Ranking Member of the House Judiciary Subcommittee with jurisdiction over rulemaking and arbitration, I strongly believe that this study paves the way for the CFPB to issue a strong rule that prohibits forced arbitration agreements in consumers’ financial services and products contracts.

“Furthermore, this study underscores the importance of creating arbitration fairness in all consumer agreements.  I strongly believe that the comprehensive solution to this problem is the Arbitration Fairness Act, which would eliminate forced arbitration clauses in employment, consumer, civil rights, and antitrust cases, and would allow consumers and workers to freely choose arbitration after a dispute occurs. This simple fix would allow a voluntary system of arbitration.” 

A fact sheet on the report is available HERE.  The complete report on arbitration is available HERE.

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