CFPB Says 90% Of Banks' Arbitration Clauses Bar Class Suits

Law360, New York (December 13, 2013, 2:58 PM EST) -- Roughly 9 out of 10 arbitration clauses allow banks to prevent consumers from participating in class actions and only a tiny fraction of consumers ever assert their right to arbitration, the Consumer Financial Protection Bureau said Thursday.

The CFPB said its preliminary research showed that while tens of millions of consumers are subject to arbitration clauses when they enter a contract for credit cards, checking accounts, payday loans and prepaid cards, they only filed an average of 300 disputes per year between 2010 and 2012 with...
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