Democratic presidential candidate Hillary Clinton is endorsing the Consumer Financial Protection Bureau’s plan to ban mandatory arbitration provisions in credit card and bank contracts.
While some presidential candidates were eating taco bowls on Thursday, Clinton was busy throwing her support behind the consumer protection agency’s newly proposed rule. The regulation would allow more people to take their credit card and loan complaints to court as class action lawsuits, rather than being forced to argue their cases individually in front of closed arbitration panels.
“With today’s proposal, the Consumer Financial Protection Bureau takes aim at yet another unfair practice on Wall Street,” Clinton said. “Mandatory arbitration clauses buried deep in contracts for credit cards, student loans, and more prevent American consumers from having their day in court when they’ve been harmed.”
Clinton went on to say that if she is elected president, she will build on the CFPB’s initial efforts to further address the problems caused by mandatory arbitration clauses and protect consumers from unfair and deceptive practices.
Thursday’s proposed rule would prohibit banks and credit card companies from putting mandatory arbitration clauses in new contracts that prevent consumers from banding together to bring class action lawsuits.
While some banking and credit card lobbying groups have already come out in opposition to the changes, class action attorney Carl Mayer called the proposed rule a “watershed moment” for consumer protection.
“This is the beginning of the end of arbitration clauses in America which have caused untold misery to millions of Americans,” Mayer says. “The presumptive presidential nominees of both parties need to immediately answer the question: Do you side with Richard Cordray and the American people or do you side with Wall Street and the lobbyists?”