Clinton Wants To End Forced Arbitration Clauses

Hillary Clinton has been pushing her liberal credentials in the last few days. Yesterday, she talked about putting some spine in antitrust enforcement, focusing on the undue market power of a handful of companies in a wide number of major industries in the US. And the day before, Clinton got firmly behind the effort to limit the use of forced arbitration clauses in the most mundane contracts for services we all use. Clinton highlighted the outrageous fraud that was committed at Wells Fargo but noted the second outrage was when the victims found they could not sue the bank but were forced into arbitration in order to resolve their claim. Arbitration has been shown to overwhelmingly favor companies at the expense of individuals. One study of credit card firms in California, determined that the companies won 95% of the cases brought to arbitration. Another drawback of arbitration is that it does not allow the individual to join a class; each person that has been a victim of the company must go to arbitration individually rather than being able to join a similar group of victims in a “group” arbitration that would work similarly to a typical class action. This requirement again benefits the companies as it requires the individual to take the time and effort to actually make it to the arbitration hearing, whereas the firm most likely has lawyers whose sole job is to deal with these cases. The CFPB has already proposed a rule, supported by Clinton, that would eliminate these forced arbitration clauses in financial contracts which would have been helpful to those victimized by Wells Fargo if it had actually been in effect. Of course, Republicans and big business are going to fight any attempt to restrict arbitration tooth and nail. But it is nice to see Hillary taking a strong stand in support of eliminating forced arbitration clauses across the board.