CONYERS: Another lesson from Equifax - We must end the predatory consumer practice of forced arbitration

By John Conyres, Jr., Hank Johnson, David Cicilline, & Don Beyer

Dean of the U.S. House
of Representatives
John Conyers, Jr.

The recent Equifax data breach jeopardized the economic security of nearly half of all Americans because of the credit rating company’s failure to safeguard our most sensitive information, which could now be in the hands of criminals. To make matters worse, many of those affected by this massive security breach are unsure whether they even have legal recourse because of the company’s use of forced arbitration clauses.

Americans are right to be outraged and frustrated and should be especially concerned about the use of forced arbitration by credit rating agencies like Equifax. Forced arbitration clauses are a predatory consumer practice written into the fine print of contracts. Signers unknowingly waive their right to sue and are forced into arbitration if a dispute arises. Americans should have a right to choose whether to sue or to seek arbitration. Preemptively eliminating our access to the justice system is a violation of every American’s right as a consumer. The justice system is one of the few tools that average citizens have to fight deceitful and harmful business practices, vindicate their rights, and pursue justice.

Equifax partially revised its forced arbitration policy in response to public outcry, but a limited change is not sufficient given the systemic nature of this problem and the scope of the lives affected. In recognition of the importance of Americans’ access to justice, the Consumer Financial Protection Bureau (CFPB) finalized a rule to eliminate forced arbitration from consumer financial product contracts.

This protection restores the rights of Americans to seek their day in court, and the transparency that comes with it, if their rights are violated by unscrupulous financial services and products. This protection is vital for the economic security of the American people and our country’s commitment to the rule of law. But rather than support this commonsense protection, credit rating agencies, like Equifax, reportedly campaigned against it and spent millions in political contributions to undermine both the CFPB rule and the CFPB itself.

The Equifax data breach shook public confidence in the entire credit rating industry. Companies such as Equifax, TransUnion, and Experian should take this moment to demonstrate their respect for the rights of customers, not undermine them. This is why we wrote to ask the three credit rating agencies to revise their terms of service and eliminate their use of forced arbitration and class action waivers on all the products they offer. Furthermore, we asked that they end their opposition to the CFPB arbitration rule to restore consumers’ day in court.

Forced arbitration clauses are a bald and predatory attempt to shield corporations from liability for their misconduct through the fine print of contracts. The credit rating agencies who we trust with our most sensitive data should not be actively working to undermine consumer rights. They should support the CFPB and the rule against forced arbitration.

Congress must also step forward to protect consumer’s rights. We have led the push in the House to pass the Arbitration Fairness Act, which would eliminate forced arbitration. It deserves a vote. Unfortunately House and Senate Republicans sought a different path. A Republican measure to repeal the CFPB rule, supported by all three credit rating agencies, passed the House of Representatives in July on a nearly-straight party-line vote. It is currently pending in the Senate. We cannot afford to let it pass. The right of your and every other American’s access to the justice system is at stake.

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CONYERS: Top Democrats Ask Equifax, TransUnion, & Experian: Will Restore Consumers Rights In The Wake Of The Equifax Data Breach?

September 21, 2017 (Washington, DC) – Following the Equifax data breach of 143 million Americans’ personal information, House Judiciary Committee Ranking Member John Conyers, Jr. (D-MI), Ranking Member of the House Judiciary Committee’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law Rep. David N. Cicilline (D-RI), and Representatives Don Beyer (D-VA) and Henry C. “Hank” Johnson, Jr. (D-GA), wrote to the three main credit rating agencies—Equifax,TransUnion, and Experian—to hear whether these companies will continue to include forced arbitration clauses in their terms of service or end their campaign against the Consumer Financial Protection Bureau’s rule to restore consumers’ day in court.

They wrote:

“The economic security of nearly half of all Americans has been jeopardized because Equifax’s failure to safeguard our most sensitive information, which is now in the hands of criminals. Making matters worse, many of those affected by this massive security breach are unsure whether they even have legal recourse because of your company’s use of forced arbitration clauses. Although Equifax has revised its policy in response to public outcry, this limited change is simply not enough given the systemic nature of this problem and the scope of the lives affected. We therefore request information concerning your plans to revise your terms of service and stance on the Consumer Financial Protection Bureau’s (CFPB) arbitration rule to restore consumers’ day in court.”

The CFPB arbitration rule includes important safeguards for consumers against forced arbitration, a practice that routinely allows corporate entities to avoid class-action lawsuits by burying legal language in the fine print of contracts that require consumers to waive their right to court.

A Republican measure to repeal that rule, supported by all three credit rating agencies, passed in the House of Representatives in July on a nearly-straight party-line vote. It is currently pending in the Senate.

The House Democrats denounced the three credit agencies for their opposition to the forced arbitration rule, writing, “Rather than support this commonsense protection, your company and others like it have reportedly campaigned against it, spending millions in campaign contributions and other efforts to undermine both the rule and the CFPB. Now is the time to demonstrate your respect for the rights of your customers, not undermine them.”

U.S. House Judiciary Democrats Letter To Equifax Regarding Consumer Protection In Wake of Data Breach by Beverly Tran on Scribd

U.S. House Judiciary Democrats Letter To TransUnion On Consumer Protection In Wake of Equifax Data Breach by Beverly Tran on Scribd

U,S, House Judiciary Democrats letter To Equifax on Consumer Protection In Wake of Experian Data Breach by Beverly Tran on Scribd

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Waters, Conyers, Johnson Lead Over 60 House Democrats in Letter Supporting CFPB Arbitration Proposal

Members Urge Swift Action to Finalize Rule to Restore Consumers’ Rights

WASHINGTON – 65 House Democrats, led by Reps. Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services; John Conyers, Jr. (D-MI), Ranking Member of the Committee on the Judiciary; and Henry C. “Hank” Johnson, Jr. (D-GA), Ranking Member of the Subcommittee on Regulatory Reform, Commercial and Antitrust Law, sent a letter to the Consumer Financial Protection Bureau expressing strong support for its proposal to limit forced arbitration in consumer contracts. The rule would ban class-action waivers in forced arbitration agreements for financial products and services, restoring consumers’ right of action when harmed by financial institutions. In the letter to Director Richard Cordray, the Members wrote that the proposed rule “is a critical step to protect the public interest by ensuring that consumers receive redress for systemic unlawful conduct.” Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress directed the CFPB to research the impact of forced arbitration clauses and promulgate a rule that would be in the public interest and for the protection of consumers. The CFPB proposed the rule in May after conducting a three-year, in-depth study on the landscape of consumer arbitrations. “By restricting class actions and class-wide arbitration in consumer contracts, these clauses enable corporations to avoid public scrutiny by precluding access to the courts,” the letter states. “This is particularly problematic for small, diffuse misconduct that harms innumerous consumers.” The Members encouraged Director Cordray to proceed quickly on the rule “to ensure that consumers have equal protection under the law.”

Conyers, Johnson, Waters Lead Over 60 House Democrats in Letter Supporting CFPB Arbitration Proposal by Beverly Tran on Scribd

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Conyers & Johnson Urge House to Reject Flawed Legislation that Strips Americans of their Access to Courts

(WASHINGTON) – Today, Congressman John Conyers, Jr. (D-Mich.) and Congressman Henry C. “Hank” Johnson (D-Ga.) sent a letter to the Financial Services Subcommittee on Financial Institutions and Consumer Credit in opposition to the “Bureau Arbitration Fairness Act.” The Financial Services Subcommittee on Financial Institutions and Consumer Credit considered this legislation today in a hearing entitled “Legislative Proposals to Improve Transparency and Accountability at the CFPB.” As the hearing commenced, and following transmission of the letter, Representatives Johnson and Conyers issued the following statement:

U.S. Representative
John Conyers, Jr.

“This afternoon, a Financial Services Subcommittee is considering the ‘Bureau Arbitration Fairness Act,’ legislation that would insulate the nation’s largest financial institutions from all legal recourse, even when they have violated the law. Specifically, this bill would eliminate the Consumer Financial Protection Bureau’s (CFPB) ability to prohibit or even limit the use of forced arbitration agreements in consumer financial contracts. For too long, large corporations have used these agreements to stack the deck against the individuals who sign up for student loans, credit cards, and other financial products without understanding dense language buried deep within agreements. Today we wrote the Financial Services Subcommittee with the simple message that enough is enough,” said Conyers and Johnson.

“Forced arbitration clauses strip individuals of their fundamental constitutional rights, depriving countless Americans of a fair process and a meaningful choice of how to resolve disputes with powerful financial corporations. In an effort to create actual arbitration fairness—unlike the so-called ‘Bureau Arbitration Fairness Act’—we have introduced H.R. 1844, the ‘Arbitration Fairness Act of 2013,’ that prevents the use of forced arbitration clauses in consumer, employment, and antitrust agreements.

“When the choice of arbitration is post-dispute—and therefore understandable and voluntary—arbitration is a fair process that parties choose willingly. We call on our colleagues in Congress to reject the unfortunate ‘Bureau Arbitration Fairness Act,’ that is designed intentionally to neuter the CFPB’s rulemaking authority.”

Johnson-Conyers Letter to Financial Services Bureau Arbitration Fairness Act, May 21, 2014

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Attorney General Eric Holder Launches Consumer Protection Working Group to Combat Consumer Fraud

Attorney General Eric Holder Launches Consumer Protection Working Group to Combat Consumer Fraud
Working Group Created Under President Obama’s Financial Fraud Enforcement Task Force Brings Together Federal, State, and Local Partners

U.S. Department of JusticeFebruary 13, 2012

Office of Public Affairs(202) 514-2007/TDD (202)514-1888

WASHINGTON—The Consumer Protection Working Group, formed under President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), convened its first meeting in Washington, D.C., today to address consumer fraud, which can financially cripple households and can cause extensive losses to our economy. The newly created group will work across federal law enforcement and regulatory agencies, and with state and local partners, to strengthen efforts to address consumer-related fraud, including schemes targeting vulnerable populations, such as the unemployed, those in need of payday loans, and those suffering from the burden of high credit card and other debt. The new working group will also focus on scams that exploit prospective students, active-duty military personnel, and veterans.

“The schemes we are combating are as diverse as the imaginations of those who perpetrate them, and as sophisticated as modern technology will permit. Thanks in large part to the leadership of the President’s Financial Fraud Enforcement Task Force we are tackling financial fraud, in all its forms, head on,” said Attorney General Eric Holder. “Through the extensive and coordinated partnership we start today, we will strengthen our collective efforts, enhance civil and criminal enforcement of consumer fraud and educate the public in an effort to prevent consumers from being victimized in the first place.”

Attorney General Holder delivered remarks at today’s meeting which was convened by FFETF Executive Director Michael Bresnick along with the working group’s co-chairs: Assistant Attorney General for the Department of Justice’s Civil Division Tony West, Assistant Attorney General for the Department of Justice’s Criminal Division Lanny Breuer, U.S. Attorney for the Central District of California André Birotte and Director of the Bureau of Consumer Protection for the Federal Trade Commission (FTC) David Vladeck. Another co-chair, Director of Enforcement for the Consumer Financial Protection Bureau Kent Markus, was unable to attend the meeting.

“We know all too well how opportunistic fraudsters have adapted their schemes to take advantage of consumers facing financial hardships, using false promises of mortgage modification, debt relief, and job placement, to name a few. Since 2009, the FTC has brought over 90 cases to stop these scams,” said Director of the Bureau of Consumer Protection for the FTC David Vladeck. “This partnership will only serve to enhance our collective efforts to protect consumers.”

The Consumer Protection Working Group will address several areas of concern, including payday lending and other high-pressure telemarketing or Internet scams, business opportunity schemes, for-profit schools that engage in fraud or misrepresentation, and fraudulent third party payment processors that facilitate payments on behalf of other fraudsters without the permission of the customer.

At today’s meeting, the Consumer Protection Working Group members set priorities and discussed taking collaborative steps to continue to seek out and prosecute consumer fraud as well as protect consumers from fraud before it happens through outreach and education. The new working group plans to establish a best-practices tool kit, legislative, regulatory and policy initiatives, and an information sharing structure.

Other members of the Consumer Protection Working Group include representatives from the Department of Treasury, FBI, Internal Revenue Service-Criminal Investigation, Federal Deposit Insurance Corporation, U.S. Secret Service, Financial Crimes Enforcement Network, Executive Office for U.S. Attorneys, Department of Education’s Office of the Inspector General, U.S. Trustee Program, the National Association of Attorneys General, U.S. Postal Inspection Service, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the National Credit Union Administration. The state attorneys general are represented on the working group by Attorney General Lisa Madigan from Illinois, Attorney General Greg Zoeller from Indiana, and Attorney General Roy Cooper from North Carolina.

The Consumer Protection Working Group is part of ongoing enforcement efforts by President Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Task force members have charged a record number of mortgage fraud cases in the past two years, trained more than 100,000 professionals responsible for awarding and overseeing Recovery Act funds and held regional summits around the country to discuss strategies, resources and initiatives, as well as to meet with communities most affected by the financial crisis.

Learn more about the Financial Fraud Enforcement Task Force at www.stopfraud.gov.

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Conyers Applauds Recess Appointment of Richard Cordray as Top Consumer Watchdog

For Immediate Release
Date: Wednesday, January 4, 2012
Contact: Matthew Morgan – 202-226-5543

Conyers Applauds Recess Appointment of Richard Cordray as Top Consumer Watchdog

(WASHINGTON) – Today, Representative John Conyers, Jr. (D-Mich.) released the following statement applauding the recess appointment of former Ohio Attorney General Richard Cordray as head of the Consumer Financial Protection Bureau (CFPB):

“President Obama’s decision to appoint Rich Cordray as the first Director of the Consumer Financial Protection Bureau sends a strong message to the American people that the implementation of the historic Dodd-Frank Wall Street Reform Act will not be held hostage by those who oppose accountability for the predatory lenders and irresponsible speculators who caused the financial crisis of 2008,” said Conyers.  “Thanks to today’s bold action by the President, the CFPB can move forward with its top cop on the beat.

“As Ohio Attorney General, Rich Cordray was a leader in standing up for consumers struggling to pay their mortgages and stay in their homes. He was a strong - and early - voice for holding big banks accountable for abusive servicing practices that are leading to unfair and unlawful foreclosures. General Cordray recovered over $2 billion wrongly looted by Wall Street banks and returned it to Ohio homeowners, taxpayers, pension funds and municipalities.

“In Rich Cordray, American consumers will gain a have a strong advocate known for his reasoned and reasonable approach, for smart work across party lines to get things done, and for his willingness to stand up to Big Wall Street banks and powerful financial industry special interests.”
 

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