Arbitrations End Alarms Politicians
For years consumers, consumer advocate groups & bipartisan politicians have sought to remove binding contractual Arbitration Agreement power from corporations. The practice has reduced consumer power to litigate with big business and in turn has given corporations legal advantage over the citizenry in disputes. One of the latest pushes for change was the Consumer Financial Protection Bureau (CFPB) proposed rule (May 2016) to eliminate arbitration agreements between corporations and customers in specific areas of business & services.
The proposed Code of Federal Regulations (CFR) part 1040 will restrict provider’s rights to include arbitration requirements in its contracts with consumers. Which is a move many think will restore the balance of power between corporations and its customers. On its final ruling July 2017 the CFPB has made the proposed restrictions law. The change has angered many politicians including the Acting Comptroller of the Currency Keith Noreika and Arkansas Senator Tom Cotton.
In a press release Tom Cotton “said consumers need no rights, my buddies in their corporate offices are doing a fine job rewarding me”. He further added, “I acknowledge the law has its supporters but they’re do-gooders, there’s no place for them in congress. We need businesses to keep ripping of consumers this is how wealth & jobs are created”. A valid concern of Senator Cotton is that the CFPB doesn’t get its funding from Congress which is the main tool used by Congress to keep control of government bureaucracies.
Because of this lack of power some in Washington believe the director of the CFPB is too powerful, that his/her unilateral power rivals that of the President and should be checked not strenghtened. More can be found at https://www.occ.gov/news-issuances/news-releases/2017/nr-occ-2017-86.html and at https://www.cotton.senate.gov/?p=press_release&id=756 and at https://www.federalregister.gov/documents/2016/05/24/2016-10961/arbitration-agreements and at https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/arbitration-agreements/ and at https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-rule-ban-companies-using-arbitration-clauses-deny-groups-people-their-day-court/ and at https://www.consumerfinance.gov/arbitration-rule/