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Oct. 10, 2016 by James Goodwin

It's Time to Give Customers of Financial Services and Products Their Day in Court

Originally published by the Oxford Business Law Blog. Reprinted with permission.

Forced arbitration clauses are now almost impossible to avoid in consumer contracts for financial services and products ranging from credit cards to private student loans. Despite their ubiquity, most consumers aren't even aware of them. This is because companies frequently bury them deep in the lengthy fine print of their contracts, which they then offer to consumers on a 'take it or leave it' basis.

Forced arbitration clauses warrant close scrutiny from policymakers and the public because their abuse poses a significant threat to the financial well-being of millions of Americans. What they say is that if you have a dispute with your financial services company and can't persuade the company to address the harm it has caused, you are prohibited from suing the corporation in court. Instead, your only option is to try pursuing your claim in an inferior forum known as 'arbitration'.

Consumers face high barriers to even initiate an arbitration claim, and, once started, they will find that every step of the process is heavily stacked against them and in favor of the financial services company. The basic principles of fairness and due process …

Sept. 15, 2016 by James Goodwin
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Last night, the House of Representatives, in an almost completely party-line vote, passed the Regulatory Integrity Act (H.R. 5226), a bill that would prohibit the U.S. Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and other agencies from engaging the public on their pending efforts to address climate change, prevent foodborne illness, and otherwise act in the public interest. Center for Progressive Reform Senior Policy Analyst James Goodwin offered the following reaction to the bill's passage: 

Poll after poll shows that the more the American people hear about individual regulatory safeguards, the more they support them. So it's no surprise that House conservatives, acting at the behest of their corporate benefactors, want to muzzle the agency experts who help develop these crucial protections. 

Make no mistake, this bill is about preventing agencies from making the public aware of proposed health, safety …

Sept. 2, 2016 by James Goodwin
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September 2, 2011, was a lot like today, the Friday before a long holiday weekend.  While many were already turning their attention to backyard barbecues and afternoon naps in hammocks, the then-Administrator of the White House Office of Information and Regulatory Affairs (OIRA) Cass Sunstein, the controversial official charged with supervising federal regulatory activities, dropped a bombshell. In a notice known as a “return letter,” Sunstein publicly announced that President Obama was rejecting what would have been one of the most important public safeguards during his time in office: the Environmental Protection Agency’s (EPA) pending rule to strengthen the national air quality standard for harmful ozone pollution. It was, and remains, one of the darkest days of Obama’s time in office, at least where public health and environmental protection are concerned.

Mountains of scientific evidence confirm that ozone pollution is nasty stuff, and high levels …

Aug. 31, 2016 by James Goodwin
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Next Wednesday, Public Citizen is holding an important event that aims to promote greater transparency in the presidential transition process. The transition process is among the most critical events in our constitutional system of democracy. As the Center for Presidential Transition lays out in detail in its Presidential Transition Guide, this process is where the incoming president's policy agenda is formulated, where candidates for key administrative posts are selected, and where at least the first year of budget priorities are translated into hard numbers. 

When it comes to policy formulation, personnel selection, and budget number crunching, the stakes in this year's presidential transition may be the highest in recent memory. With at least two more years of divided government likely, administrative policymaking, as distinct from legislation, will continue to take on a dominant role. Bottom line: The agenda the next president adopts, and the appointees …

Aug. 23, 2016 by James Goodwin
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Yesterday, several CPR Member Scholars and staff formally submitted comments on the Consumer Financial Protection Bureau's (CFPB) proposed rule to limit the use of forced arbitration agreements in consumer contracts for financial products like credit cards and bank accounts. 

CPR Member Scholars and staff have been tracking this rulemaking for over a year and in May 2016 published a report that assessed several key issues shortly before the CFPB released its proposal. In particular, our report evaluated the CFPB's preliminary outline for the rule and a comprehensive study that the agency conducted to inform the rulemaking's provisions. Among other things, the report highlighted the important role of the civil justice system in reinforcing and complementing the U.S. regulatory system. By denying citizens access to the courts, forced arbitration effectively undermines the proper functioning of the civil justice system, thereby weakening regulatory programs aimed …

Aug. 15, 2016 by James Goodwin
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While the Rolling Stones' "You Can't Always Get You Want" may be an ill-advised campaign song, perhaps it can still serve as the official theme song for Sen. David Vitter's (R-LA) Government Accountability Office (GAO) report requests. The anti-regulatory senator had requested that the GAO audit the Consumer Financial Protection Bureau (CFPB) – a favorite punching bag of the right – to determine whether it is complying with the small business outreach requirements imposed by the Small Business Regulatory Enforcement Fairness Act (SBREFA). Last week, the GAO released the findings of its audit. Just one tiny problem, though: They are probably not what Vitter wanted to hear. 

Before getting into the GAO's specific findings, a little background is in order. Anti-regulatory members of Congress like Vitter continuously peddle the narrative that the federal agencies that previous congresses have charged with protecting public health, safety, the environment …

July 14, 2016 by James Goodwin
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In an earlier post, CPR Member Scholar Robert Glicksman discussed the need for the next president to champion a truly positive vision of government and regulation. A new way of thinking and talking about these issues is critically important, and the president should play a key role in charting this course. 

While a rhetorical shift is important and long overdue, it is also crucial that the next president be prepared to match actions to words. Consequently, the next president should also commit to building a 21st century regulatory system, one that makes good on the promise of a positive vision of government by working to protect our health, safety, environment, and financial security. Continued political gridlock in Congress – if that's what the November election yields – will likely defeat timely and effective legislative responses to public threats of harm. Instead, if any such protections are to come …

July 6, 2016 by James Goodwin
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This afternoon, the House Judiciary Committee's Subcommittee on Regulatory Reform, Commercial, and Antitrust Law will hold an oversight hearing that looks at the Office of Information and Regulatory Affairs (OIRA), the powerful White House bureau that sits at the center of the regulatory universe. 

Originally created to oversee federal agencies' implementation of the Paperwork Reduction Act, a series of presidential executive orders stretching back to the Reagan administration has endowed OIRA with a powerful gatekeeping role over executive agencies' rulemaking output: no final rule of any consequence can see the light of day without OIRA's imprimatur. As CPR has documented for several years now, OIRA has generally wielded this power in an anti-regulatory fashion, typically working on behalf of politically connected industry lobbyists to block, delay, or dilute public safeguards. This pattern has held for presidential administrations from both parties. 

Headlining the hearing is OIRA …

June 14, 2016 by James Goodwin
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This afternoon, Speaker Paul Ryan is scheduled to announce the House majority's latest plan to weaken the U.S. system of regulatory safeguards on which all Americans depend. The following is Center for Progressive Reform Senior Policy Analyst James Goodwin's reaction to this plan: 

Speaker Ryan and his anti-regulatory apostles in the House would have you believe that their latest attack strategy on our system of regulatory safeguards is a serious, forward-looking plan. In fact, everything it contains is not just old, but stale. The talking points are hackneyed; the so-called supporting research was debunked long ago; and the proposals it contains are bad ideas that have been trotted out countless times before. This plan would take us back to the laissez-faire days of the Gilded Age. An America run by robber barons didn't serve us well then, and it certainly wouldn't serve …

June 6, 2016 by James Goodwin
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Tomorrow, the Senate Environment and Public Works Committee's Subcommittee on Superfund, Waste Management, and Regulatory Oversight is set to hold a hearing investigating the Environmental Protection Agency's (EPA) compliance with the Unfunded Mandates Reform Act (UMRA). UMRA is striking because it was passed in 1995 as part of then-House Speaker Newt Gingrich's attacks on the U.S. regulatory system – an era that is reminiscent of today's strident anti-regulatory zeal. Indeed, today's anti-regulatory members of Congress continue to explore ways to use UMRA as a weapon for kneecapping agencies they oppose on political grounds or that are inconvenient to their corporate benefactors. 

The essential premise of UMRA is far from objectionable – that federal agencies should collaborate with state, local, and tribal partners when developing new safeguards. But, as CPR Member Scholar and Board Member Rob Glicksman will testify tomorrow, the pursuit of UMRA …

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