Thanks, Liz

The CFPB just moved to end arbitration on consumer loans and credit cards:

Richard Cordray, director of the Consumer Financial Protection Bureau, pointed out what a major change his agency was poised to bring about. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them,” he said in a statement.

The rule would apply only to the consumer financial companies that the agency regulates. It would not apply to arbitration clauses tucked into contracts for cellphone service, car rentals, nursing homes or employment.

“It is a good start,” said Berle M. Schiller, a federal judge in Philadelphia who has been critical of arbitration clauses that dismantle class actions and tip the scales in favor of companies. “Class actions are the only way that companies can be brought to heel.”

The agency’s proposed rule would be the first significant check on arbitration since a pair of Supreme Court decisions in 2011 and 2013 blessed its widespread use. Those decisions signaled the culmination of an effort by a coalition of credit card companies to stop the tide of class-action lawsuits.

Elizabeth Warren's vision for the CFPB, which she brought into existence despite opposition from many in the Obama administration is bearing some significant fruit.

H/t Naked Capitalism.