Op-Ed
Credit Arbitration Clauses Favor Corporations
By Charlene Crowell
NNPA Columnist
Although arbitration is often associated with labor unions, millions of consumers are also affected by it and don’t even know it. Often consumers find the extremely small print of credit agreements difficult to read. Others become bewildered by the legal jargon embedded in these clauses.
In either case, consumers should take note. The adage, ‘the devil is in the details’ still holds true.
A new report released by the Consumer Financial Protection Bureau (CFPB) found that more than three in four consumers surveyed did not know whether they were subject to a credit arbitration clause. Checking accounts, credit cards, mobile wireless providers, payday loans and prepaid cards were the six financial areas that CFPB analyzed.
Even worse, CFPB determined that despite arbitration clauses dominant presence in consumer credit agreements, the clauses work more in favor of corporations than consumers. All too often, credit terms are seldom negotiable. Only in a few instances are consumers given a one-time chance to opt out of these terms. Additionally, when disputes arise, consumers seldom choose the arbitrator and creditors typically pay for arbitration services.
As consumers accept credit terms, they often forfeit their rights to legal action as an individual or as part of a class action. In short, from a consumer perspective the choice becomes ‘take it or leave it’.
“Tens of millions of consumers are covered by arbitration clauses, but few know about them or understand their impact,” said Richard Cordray, CFPB Director. “Our study found that these arbitration clauses restrict consumer relief in disputes with financial companies by limiting class actions that provide millions of dollars in redress each year.”
In reaction to CFPB’s new report, business lobbyists and organizations spoke up on how arbitration remains a cost-saving tool and as a result, helps to preserve affordability in financial services.
Yet many consumer advocates held a near-opposite view.
“Forced arbitration isn’t an alternative forum for resolving disputes; it’s a get-out-of-jail-free card for corporations,” said Ellen Taverna, legislative director of the National Association of Consumer Advocates.
“The findings of the CFPB study are crystal clear,” said David Seligman, an attorney with the National Consumer Law Center. “These clauses are written by corporations to set up a secret and lawless process that prevents consumers from holding corporations accountable for unlawful conduct.”
Over a five-year period, CFPB analyzed evidence from consumer contracts, court data, surveys and more to determine whether arbitration clauses offered a fair and transparent resolution of consumer complaints in six consumer financial markets. The findings were as eye-opening as they were broad in impact.
Payday loans and prepaid cards were found to have the highest usage of arbitration clauses, at 99 and 92 percent, respectively. It should be noted that in California and in Texas, two states with some of the highest numbers of payday stores, CFPB obtained data on more than 99 percent of store locations.
The remaining credit areas studied still made significant use of arbitration agreements: mobile wireless (88 percent), private student loans (86 percent), credit cards (53 percent) and checking accounts (44 percent).
Other CFPB findings include:
• Over the five years studied, 1,847 arbitration disputes were filed but the total amount of relief and debt forbearance that consumers received was less than $400,000;
• Corporations obtained decisions that required consumers to pay $2.8 million, largely for disputed debts during the same period;
• Nearly 34 million consumers could have been eligible for at least $1.1 billion in cash payments; and
• At the same time, among those not affected by forced arbitration clauses, at least 160 million class action members, were eligible for $2.7 billion in cash, in-kind relief, expenses and fees through federal legal proceedings.
“Companies claim that arbitration is simpler, easier, and cheaper – but they fail to mention that forced arbitration rarely provides the impartiality or meaningful review that a consumer can get in a court of law,” says Mitria Wilson, a vice-president with the Center for Responsible Lending.
“In the worst examples, we’ve seen consumers being asked to travel to faraway places to try to enforce their rights only to find out that the ‘impartial’ arbiters were selected exclusively by the companies that their dispute is with. These proceedings are virtually impossible to get overturned through a court of law –even if blatant mistakes are made.”
In 2010 and as part of the Dodd-Frank Wall Street Reform Act, Congress directed CFPB to conduct a study and provide a report on the use of pre-dispute arbitration clauses in consumer financial contracts. Dodd-Frank also banned the use of arbitration clauses in most residential mortgage loans. The issue of arbitration’s effects on consumers was also brought before Congress in 2007 when it enacted the Military Lending Act.
“This report is an important one – and we hope it serves as a precursor to a strong and robust rule prohibiting this practice,” concluded Wilson.
Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.
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Commentary
Commentary: Kamala’s Convention Is High Energy Show of Unity
“This is going to be a great week,” Vice President Kamala Harris declared in an unexpected early appearance that brought down the house on day one of the Democratic National Convention in Chicago. It was already an emotional night after Jesse Jackson in a wheelchair was brought out in front of the crowd to cheers. The man who ran for president twice in the 80’s behind a rainbow coalition, didn’t speak. But his presence was all that was needed to let us know how far we’ve come.
![Courtesy of KamalaHarris.com](https://www.postnewsgroup.com/wp-content/uploads/2024/08/kamalas-convention-featured-web.jpg)
By Emil Guillermo
“This is going to be a great week,” Vice President Kamala Harris declared in an unexpected early appearance that brought down the house on day one of the Democratic National Convention in Chicago.
It was already an emotional night after Jesse Jackson in a wheelchair was brought out in front of the crowd to cheers. The man who ran for president twice in the 80’s behind a rainbow coalition, didn’t speak. But his presence was all that was needed to let us know how far we’ve come.
Harris, the country’s first Asian and Black woman ever to be vice president, by the end of the week would become the first woman to be nominated as the standard bearer for the Democratic Party.
But she knew she had to honor the man who made it possible. Jackson? No, Joe Biden.
“I want to kick us off by celebrating our incredible President Joe Biden,” said Harris, who thanked the president for his leadership and lifetime of service, which includes stepping aside more than four weeks ago.
But first, Harris looked at the diverse crowd and promised them that “this November, we will come together and declare with one voice, as one people, we are moving forward with optimism, hope and faith so guided by our love of country, knowing we have so much more in common than what separates us.”
It was a mini “anti-politics of division” speech, policy be damned, give me joyful rhetoric. It set the tone for the huge convention crowd that responded with the kind of energy we haven’t seen since the Obama years.
And then we waited more than two hours for the Democrats to send out Joe Biden.
BIDEN’S FAREWELL
Was this some left-handed honor?
If political conventions are really TV shows, Joe Biden didn’t even make prime time on his own night. On the west coast maybe, but in the east, he was on after the late news.
It’s the way the last five weeks have gone for Biden, wrestling with the notion he’s past his prime.
Or maybe the lateness was intentional to show everyone, all his detractors, the ones who deftly pushed him to the side, that a Joe Biden “in full” could still go nearly 50 minutes at the top of his game.
After an emotional introduction from his daughter Ashley (“He’s still my best friend,” she said), Biden was wide awake for this moment, setting the record straight about what he’s done and what he’s yet to do.
He saved his ire for Donald Trump, the man who, as Biden said, promised infrastructure, but “never built a damn thing.”
Maybe his own ego?
And all while being the man who would destroy our nation.
“He’ll be a dictator on day one, his words,” Biden said with zeal. “This sucker means it.”
It was an energized Biden, who had a few stumbles, but no one cared. He laughed it off. We all did, unlike the last few months when each word was scrutinized through an ageist filter.
But here he was more than functional and powerful, and about to let it all go.
I’m sure it made some people wonder that if this Biden had appeared at that June 27 debate, we’d be having a totally different convention this week.
“I made a lot of mistakes in my career, but I gave my best to you for 50 years,” Biden confessed. He recollected how he was too young to be in the Senate because he wasn’t 30 yet, but now he was “too old to stay as president.”
That got a little laugh.
“But I hope you know how grateful I am to all of you,” Biden said. “I can honestly say, I’m more optimistic about the future than I was when I was elected as a 29-year-old United States Senator.”
And with that, he made peace with his destiny.
Biden went from being “the” guy, to “the guy who kept the presidential door ajar,” so that Kamala Harris, the first Black and South Asian woman, could go forward and through.
About the Author
Emil Guillermo is a journalist and commentator on race, media, culture, and politics. See his secret podcast on YouTube.com/@emilamok1. Contact: www.amok.com
California Black Media
Opinion – Kamala Harris: Imagining What Can Be, Unburdened by What Has Been
As we enter the final 90 day stretch of what will likely be the most bizarre presidential election cycle in modern American history, the two leading candidates for president of the United States have staked out very interesting communications strategies. Trump is being Trump. He remains true to his persona, with his supporters admiring his actions while his detractors only seeing flaws. On the other hand, Harris has deployed a cunning strategy of deceit and avoidance. And with the aid of her allies in the press, has been able to seamlessly shift her stance on key policy issues from immigration to healthcare without batting an eyelash.
![Craig J. DeLuz. Courtesy of Craig J. DeLuz](https://www.postnewsgroup.com/wp-content/uploads/2024/08/imagining-what-can-be-featured-web.jpg)
By Craig J. DeLuz, Special to California Black Media Partners
As we enter the final 90 day stretch of what will likely be the most bizarre presidential election cycle in modern American history, the two leading candidates for president of the United States have staked out very interesting communications strategies.
Trump is being Trump. He remains true to his persona, with his supporters admiring his actions while his detractors only seeing flaws. On the other hand, Harris has deployed a cunning strategy of deceit and avoidance. And with the aid of her allies in the press, has been able to seamlessly shift her stance on key policy issues from immigration to healthcare without batting an eyelash.
The most striking aspect of this strategy is the campaign’s consistent mischaracterization of Donald Trump’s stances. Rather than engaging in a reputable and respectful exchange of ideas, the Harris camp has resorted to vilifying and maligning Trump, often resorting to gross exaggerations and blatant untruths. Despite Trump’s repeated assurances that he does not support cuts to social security benefits, Harris insists that he intends to slash these programs. She also fabricates claims that he seeks a nationwide abortion ban, disregarding his clear statements that he does not support such a ban and that the decision should be left to individual states. Additionally, Harris boasts about her tough stance on border security, despite over 10 million illegal crossings at the southern border during her tenure as “Border Czar” in the Biden-Harris administration
Furthermore, Harris’ deliberate avoidance of media interviews and her reluctance to answer questions is an alarming and dubious tactic. Harris’ most recent sit-down interview was nearly two months ago on MSNBC’s “Morning Joe”, where she discussed the Roe v. Wade anniversary. Since then, the public witnessed Joe Biden’s cognitive decline on national television, an assassination attempt on Trump’s life, the Republican National Convention, Biden’s withdrawal from the presidential race, and Harris’ nomination as the Democratic candidate; all newsworthy events that were seemingly unworthy of commentary. In fact, the only question she has answered recently was when she would do an interview, to which she responded, “before the end of the month.” In an era where information is easily accessible and voters demand transparency from their leaders, avoiding the media is both counterproductive and undemocratic. By limiting her interactions with the media, Harris is cherry-picking her audience and attempting to control the narrative, instead of engaging in open and honest communication with all Americans.
However, the most concerning aspect of Harris’ communications strategy is her frequent reversals on crucial issues. She was in favor of banning fracking before she was against it. Her stance on single-payer healthcare has been fluid and uncertain. And just recently, she launched a multi-state ad campaign presenting herself as an immigration hardliner, committed to securing our southern border, despite previously claiming that it was already secure. On multiple occasions, Harris has changed her position, often depending on the political climate or her audience.
Kamala Harris carefully crafted her communication strategy. Through her campaign, Kamala Harris is truly “Imagining what can be, unburdened by what has been.”
About the Author
Craig J. DeLuz has almost 30 years in public policy and advocacy. He currently hosts a daily news and commentary show called The RUNDOWN. You can follow him on X at @CraigDeLuz.
Black History
Opinion: Sha’Carri, H.E.R., and Kamala’s Olympian Dash to the Presidency
I know the Olympics are over. Consider this me just running through the tape. You know, the one at the finish line. (Remember as the 100-meter gold medalist Noah Lyles found out, a leg can beat you, but it’s the first torso to cross that counts). I’m still savoring all of the Olympics highlights.
![Courtesy of Harris-Walz Campaign.](https://www.postnewsgroup.com/wp-content/uploads/2024/08/harris-ppresidency-featured-web.jpg)
By Emil Guillermo
I know the Olympics are over. Consider this me just running through the tape. You know, the one at the finish line.
(Remember as the 100-meter gold medalist Noah Lyles found out, a leg can beat you, but it’s the first torso to cross that counts).
I’m still savoring all of the Olympics highlights.
My favorite moment — even more than the wild Stephen Curry three that nailed the gold in men’s basketball–was the Women’s 4×100 relay and Sha’Carri Richardson. Far behind, as she got the baton for the anchor leg, Richardson was magic in motion. With a phenomenal burst of speed, she made up the lost ground in seconds. But it was her glance back at the smoked competition as she crossed the finished line that got me.
Unforgettable.
To top it off was the closing ceremony that included H.E.R., singing the “Star Spangled Banner,” our country’s national anthem. It was H.E.R. representing all of us — the Asian American Filipino/African American pop star a/k/a Gabriella Sarmiento Wilson of Vallejo, Calif.
She was the face of America, welcoming the next games to our nation where in 2028, the entire country will be closer to what California already is, a minority-majority state. Seeing the multiracial singer was the extension of an ideal theme that a world where people have a love interest in one another, will get along with each other.
It’s the hope of a world at peace beyond the Olympic zone.
KAMALA IN THE BAY AREA FOR $13 MILLION
As the closing ceremonies were relayed from Paris, another biracial icon was continuing her Olympian sprint to the presidency. Kamala Harris was back in the Bay Area to share her campaign joy with rich homies.
At the Fairmount in San Francisco, the tickets ranged from $3,300 to up to $500,000 — a sliding scale for the well-heeled. Far from the $5 dollar internet pitches that end up in your inbox daily.
There were some who gladly paid at the low-end forgoing a vacation to support a historic run to save democracy. Nearly 700 attendees offering up more than $13 million were reported on the inside, including high tech folks and politicos like attorney general Rob Bonta.
Outside of the event, Harris also drew the same type of Pro-Gaza protestors who have dogged her at events in Las Vegas and Detroit. “Killer Kamala, you can’t hide, we charge you with genocide,” was the chant, according to reports.
The protestors accuse Israel of genocide against the Palestinians but hold the Biden/Harris administration just as accountable for the tens of thousands who have died in Gaza.
Harris never saw the protestors on Nob Hill. But she saw them in Detroit, where she let the protestors have their First Amendment right, and then spoke directly them.
“If you want Donald Trump to win, then say that, otherwise, I’m speaking,” Harris said to cheers from supporters who drowned out the protestors.
It was as tough and as candid as Harris has been on any issue since she began her campaign.
For now, she is the joyful, feelgood Kamala, raising millions, staying on message, and “moving forward not backward.”
About the Author
Emil Guillermo is a journalist and commentator. See him on YouTube.com/@emilamok1. Or at www.amok.com
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