We noted in a blog post from earlier this year the deep concern of one Ohio legislator and other like-minded thinkers across the country regarding contractual arbitration clauses.
The stated fear of people like Ohio’s Democratic Senator Sherrod Brown is that such provisions in agreements with financial institutions weaken consumer protections. Critics say that mandatory arbitration eliminates valuable courtroom safeguards.
We noted in our June 14 entry that Brown was “having a hard slog of it” gaining much Senate support for proposed legislation to rein in arbitration clauses.
The frustration that Brown and his supporters obviously felt this past summer undoubtedly increased last week, in the wake of a pro-arbitration vote unanimously endorsed by Republicans.
What the Senate specifically endorsed on party lines was the rejection of a rule issued earlier this year by the Consumer Financial Protection Bureau. The CFPB’s enactment was aimed at overriding contractual language seeking to force consumers with legal claims into private arbitration. The bureau supports the right of consumers’ to collectively bring class-action lawsuits against alleged corporate wrongdoers.
Some commentators say that the Senate’s tossing of the CFPB rule signals even more business-friendly moves ahead that will strengthen the legal hand of companies insisting that consumers opt for arbitration instead of court when pursuing a legal claim.
“The White House has signaled its support of class-action waivers,” notes a recent national report.
We will keep readers posted on any key developments linked with this subject matter. The arbitration-versus-litigation debate is unquestionably an important business topic.