The Consumer Financial Protection Bureau (CFPB) released a proposed rule to restore the right of consumers

The Consumer Financial Protection Bureau (CFPB) released a proposed rule to restore the right of consumers to join together to hold corporations accountable when they break the law.

This proposed rule would limit the financial industry’s use of forced arbitration, an abusive practice used to block consumers from challenging predatory practices such as hidden fees, fraud, and other illegal behavior and stripping way their right to argue their case before an impartial judge and jury. Banks have been inserting into the fine print of consumer contracts a clause that forces people to go in front of an arbiter who works for the bank to “settle” disputes -- almost always in favor of the bank, of course.

While the CFPB’s current proposal does not end forced arbitration, it does prohibit companies from using one of the most damaging and common elements of the practice — bans on class actions. These bans prevent consumers who have suffered similar harms from joining together to take on a corporation as a group, effectively allowing corporations to break the law without consequence.

We commend the CFPB for taking this crucial step to limit big banks’ and other financial companies’ efforts to escape accountability for breaking the law, and ask the agency to use the full force of its authority to restore consumer rights to choose how to resolve disputes with financial institutions in this, and every, context in the final rule.