Some 423 law school, university, and college educators are sending a letter to two legislators, encouraging them to support a rule the Consumer Financial Protection Bureau has passed.
The CFPB published a final version of the law in July that would ban businesses from putting “mandatory negotiation clauses” in their contracts, sign that prohibits customers from bringing class-action suits against them. It refers to institutions that sell monetary products, including bank accounts and credit cards.
Rather than being left to sue, consumers who sign such a contract have to settle disputes with businesses through privately selected individuals known as referees, allowing businesses to save time and money and avoid negative publicity.
“Class action lawsuits are an essential means of protecting consumers damaged by violations of federal or state law,” the letter says. “Class actions allow a court to see that a company’s violations are widespread and to order proper relief.”
The CFPB’s mandatory adjustment rule was in the news recently in the result of a security breach at credit reporting agency Equifax, when consumer advocates said that violation showed why suing financial companies can be important. After the breach, consumers filed various class-action suits against Equifax.
“This is a prime part of why we need the CFPB rule,” said George Slover, senior policy attorney at Consumers Union, a consumer advocacy group based in Yonkers, N.Y.
Members of the House in July voted to abolish that rule, which now faces a vote in Senate. Depending on the Senate’s schedule, it’s unclear when or if the election will take place. If the Senate does not vote against it, firms will be expected to comply with the rule starting in March 2018. It would not apply to agreements entered into before that.
The professors are giving the letter Monday because it is Sept. 25, the anniversary of when Congress passed the Seventh Amendment to the U.S. Constitution in 1791, which says: “In suits at common law, where the value in discussion shall exceed twenty dollars, the right of trial by jury shall be protected.”
Take your time to comment on this article.
Latest posts by Harikrishna Mekala (see all)
- Google is opening up Maps to game developers - March 16, 2018
- Reddit has banned Cryptocurrency Ads in their platform - March 15, 2018
- Paying Subscribers will receive Prioritized News Feed from Google - March 14, 2018