AFT Applauds CFPB on Banning Forced Arbitration in Bank Fraud Cases

WASHINGTON—Statement by American Federation of Teachers President Randi Weingarten on Consumer Financial Protection Bureau’s final rule prohibiting mandatory arbitration when consumers challenge financial fraud:

“Today the Consumer Financial Protection Bureau finalized its rule to restore the rights of student loan borrowers, credit card consumers and millions of others to join together in challenging financial fraud and scams in court. This is another example of the Consumer Financial Protection Bureau and Director Richard Cordray standing up for millions of consumers against a Trump administration that is pushing an agenda to back away from consumer protections and enrich the big banks and other predatory financial actors, such as for-profit colleges, by effectively giving banks a license to steal through forced arbitration.

“These companies have made millions by burying ‘rip-off clauses’ in the fine print of borrowers’ contracts to evade public accountability for charges of fraud and lawbreaking by forcing consumers into secret arbitration proceedings rigged in the banks’ favor. For example, 85 percent of private student loans, 99 percent of payday loans and 92 percent of prepaid cards that were studied were subject to these clauses. The AFT applauds the Consumer Financial Protection Bureau for restoring these basic consumer protections.”