Requiring customers to sign arbitration clauses when signing up for financial products has become standard practice since a 2011 U.S. Supreme Court validated the practice. The CFPB jumped into the issue at the direction of Dodd-Frank.
The current crop of letters, some coming from members of Congress and state attorneys general, reveals the passions this inflames. Around 6,000 were considered mass mail by the CFPB because they were form letters, sent together, or extremely similar.
Supporters, who are mostly Democrats, lawyers, organizations that advocate for the poor, told the agency that lawsuits are the best way to rectify wrongful practices and they portrayed arbitration clauses as snuck into contracts to deny consumers their constitutional rights.
"Forced arbitration shields corporations from accountability for abusive, anti-consumer practices, which only encourages unscrupulous business practices by allowing violations of the law to go unchecked," said a comment letter from 38 U.S. senators including Virginia's Tim Kaine, the Democratic Party's vice presidential candidate in the Nov. 8 election.
The proposal's opponents, including conservatives, small businesses and car dealerships, said it will would increase their costs and open the door to "frivolous" lawsuits, benefiting only fee-driven trial attorneys.