New CFPB Rule–Banks and Finance Companies Will be Barred from Using Forced Arbitration to ban Class Actions

New CFPB Rule–Banks and Finance Companies Will be Barred from Using Forced Arbitration to ban Class Actions Banks and payday lenders have had a good deal going for a while: They could break the law, trick their customers in illegal ways, and not have to face any consumer lawsuits. Armed by some pretty bad 5-4 Supreme Court decisions, they could hide behind Forced Arbitration clauses (fine print contracts that say consumers can’t go to court even when a bank acts illegally), even when it was clear that the arbitration clauses made it impossible for a consumer to protect their rights....

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Senate Takes Up Prof Warren’s proposed Financial Product Safety Commission

Law Professor Elizabeth Warren proposes that Congress create a Financial Product Safety Commission to help protect consumers from predatory and deceptive financial products. To illustrate the need for such a commission, Prof. Warren points out that if a consumer goes into an appliance store looking for a toaster that has a 1 in 5 chance of exploding, you won’t find one. But if you go to a mortgage broker, you can buy a loan that has a 1 in 5 chance of ending up being foreclosed with you losing your house in the process. Introduced by Senators Schumer and Durbin,...

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