WASHINGTON, D. C. – Attorney General Karl A. Racine has joined a coalition of 20 attorneys general in urging Senate leaders not to repeal the Consumer Financial Protection Bureau’s (CFPB) Arbitration Rule, which stops companies from forcing consumers to sign away their legal rights. The multistate letter, led by Massachusetts Attorney General Maura Healey, was to Senate Majority Leader Mitch McConnell and Minority Leader Charles Schumer.

“Everyday consumers in the District should have the right to bring an action in court against a company that has wronged them, and the CFPB Arbitration rule protects that right,” Attorney General Racine said. “We fought hard for this rule to ensure consumers aren’t forced to sign away their access to justice -- and Congress shouldn’t remove the protection the Arbitration Rule provides.”

Many contracts required to purchase common financial products (such as credit cards, payday loans, and checking accounts) routinely contain binding arbitration clauses. These clauses can effectively prevent consumers from suing their bank or other financial institution over wrongdoing by preventing consumers from joining class-action lawsuits – making it more difficult for consumers to sue corporations, particularly if the individual amounts of money in dispute are relatively small. In March 2015, the CFPB released a study that showed that very few consumers ever think to bring individual actions against their financial service providers either in court or in arbitration, which is why class-action cases are vital to gaining justice for consumers.

The House recently passed a Joint Resolution of Disapproval that would set aside the Arbitration Rule under the Congressional Review Act. The attorneys general are asking the Senate to oppose that resolution and support consumers’ rights to go to court to assert their claims against financial institutions.

“The CFPB’s Arbitration Rule would deliver essential relief to consumers, hold financial services companies accountable for their misconduct, and provide ordinary consumers with meaningful access to the civil justice system,” the letter states.

In August, Attorney General Racine led a coalition of attorneys general in sending a multistate letter to CFPB Director Richard Cordray supporting the creation of the rule and calling for the restoration of these protections for consumers.

In addition to Attorneys General Racine and Healey, the states whose attorneys general joined the letter were: California, Connecticut, Delaware, Hawaii, Iowa, Illinois, Maryland, Maine, Minnesota, New Mexico, New York, North Carolina, Pennsylvania, Rhode Island, Oregon, Washington, Vermont, and Virginia. Hawaii’s Office of Consumer Protection also joined the letter. A copy is attached.