Public Justice: CFPB should ban mandatory arbitration

Arthur Bryant of Public Justice argues that the CFPB should ban mandatory arbitration.

Recent decisions by the U.S. Supreme Court have given banks, credit card companies, and all other lenders a license to steal billions from consumers and small businesses. The U.S. Consumer Financial Protection Bureau (CFPB) has the power to rescind that license. On Tuesday, at a hearing in Newark, the CFPB is expected to announce whether it will do so. If it does what the facts and law require, it must. In two cases in the past four years, the Supreme Court allowed corporations to charge allegedly illegal fees to millions of consumers and small businesses, net billions, and walk away with the money. The corporations' form "agreements" barred all lawsuits against the companies, required consumers and small businesses to pursue their claims individually in arbitration, and banned class actions. The court enforced these agreements, even though that meant the companies would never be held accountable. Sadly, these two cases weren't anomalies. Far too many lenders cheat and mislead consumers, charging inflated and illegal fees or interest. But the court has given them near-total immunity. Thankfully, that can be changed - and should be soon. When Congress passed the Dodd-Frank Act in 2010, it created the CFPB and required the new agency to study the use of arbitration clauses by lenders. Congress said that the CFPB should prohibit or limit their use if it found that they harm consumers. The evidence proves that forced-arbitration clauses hurt consumers badly. This issue affects everyone in America. Here's the bottom line: The primary effect of mandatory-arbitration clauses is to suppress claims by consumers, allow corporations to break the law, and prevent our civil justice system from providing injunctive relief (like having debts forgiven or credit records cleared) and compensation to millions of consumers; , , , The CFPB should ban mandatory arbitration clauses and rescind the lenders' license to steal. Consumers are entitled to what is engraved on the front of the Supreme Court - "Equal Justice Under Law" - not what the Supreme Court has given them:

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Senator Elizabeth Warren warns us about the Trans-Pacific Partnership

Elizabeth Warren warns us about the Trans-Pacific Partnership, as reported by the Public Citizen Consumer Blog:

Sen. Warren's op-ed in the Post this week is a must-read, and a must-share: it explains how our country's consumer, worker, and environmental protection laws could be undermined by a dispute-resolution clause in the TPP, currently being negotiated. More generally, the danger Sen. Warren describes is a potent illustration of how trade deals that may sound benign in terms of their general aims can contain some pretty radical giveaways to corporate interests. Here's a flavor:
[The Investor-State Dispute Settlement clause, or ISDS] would allow foreign companies to challenge U.S. laws — and potentially to pick up huge payouts from taxpayers — without ever stepping foot in a U.S. court. Here’s how it would work. Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators. If the company won, the ruling couldn’t be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions — and even billions — of dollars in damages.

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Suits filed regarding municipal fees

The following press release was issued today regarding suits filed by my law firm (Campbell Law, LLC) working alongside the Law Clinic of St. Louis University School of Law and ArchCity Defenders. At issue are illegal fees being charged by many municipalities. In this particular set of cases, many cities are charging people "warrant fees" when they attempt to pay overdue traffic offenses. We've alleged that these fees are illegal because they are prohibited by Missouri State Law. We intend to pursue additional cases regarding illegal municipal fees as additional violations and victims come to light. My law partners ( John Campbell and Alicia Campbell ) and I are proud to be part of this endeavor. Here is today's press release:

SEVEN CITIES ARE SUED FOR COLLECTING ILLEGAL FEES IN MUNICIPAL COURTS

St. Louis (Dec. 9, 2014) – A team of attorneys from three public interest law offices filed class action lawsuits against seven St. Louis County municipalities for charging illegal fees in their municipal courts. The lawsuits come amid new scrutiny of municipal courts and the systemic issues of high fees and warrants that adversely affect low-income defendants.

The class action lawsuits were filed against Ferguson, a city at the center of the focus on policing and municipal courts, as well as Beverly Hills, Fenton, Jennings, Pine Lawn, Wellston and Velda City. The suits claim that fees for warrants are not authorized by state law.

Plaintiffs in the seven separate suits are represented by attorneys John Campbell, Alicia Campbell and Erich Vieth of the private public interest law firm of Campbell Law, LLC; Thomas Harvey and Michael-John Voss of ArchCity Defenders, a nonprofit organization serving the homeless and working poor; and Professors John Ammann and Brendan Roediger of the Saint Louis University Legal Clinics.

“There are serious problems in our municipal courts, and these lawsuits are an attempt to hold these cities accountable by forcing them to remedy the wrongs of the past,” said John Campbell of Campbell Law. Professor Brendan Roediger of the Saint Louis University Legal Clinics said, “Our goal is to stop cities from filling their coffers with illegal fees and from continuing to conduct for-profit policing.”

“The cities have charged an untold amount of money illegally to thousands of people; money that could have gone to help families and help the economy,” said Thomas Harvey, executive director of ArchCity Defenders. “We hear municipal officials and police repeatedly say citizens must be held accountable for their actions. Now it is time for these municipalities to be held accountable.” The lawsuits call for a judgment that the fees violate state law, an accounting of who paid the illegal fees and how much, and for reimbursement to defendants who were forced to pay the fees to avoid jail time or warrants. The suits also include a claim under the Missouri Merchandise Practices Act, the state’s consumer fraud statute, alleging the cities attempted to deceive defendants into paying the fees.

Ferguson recently repealed the ordinances charging the illegal fees, but made no effort to reimburse defendants who were charged the illegal amounts, including a $50 warrant recall fee and a $15 failure to appear letter fee.

The team of lawyers expects to file lawsuits against additional cities in St. Louis County in the near future.

For more on these issues, check out this detailed article in the Washington Post:  "How municipalities in St. Louis County, Mo., profit from poverty."

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Grand Juries and Police Officers

From Five Thirty Eight:

Former New York state Chief Judge Sol Wachtler famously remarked that a prosecutor could persuade a grand jury to “indict a ham sandwich.” The data suggests he was barely exaggerating: According to the Bureau of Justice Statistics, U.S. attorneys prosecuted 162,000 federal cases in 2010, the most recent year for which we have data. Grand juries declined to return an indictment in 11 of them... “If the prosecutor wants an indictment and doesn’t get one, something has gone horribly wrong,” said Andrew D. Leipold, a University of Illinois law professor who has written critically about grand juries. “It just doesn’t happen.” Cases involving police shootings, however, appear to be an exception. As my colleague Reuben Fischer-Baum has written, we don’t have good data on officer-involved killings. But newspaper accounts suggest, grand juries frequently decline to indict law-enforcement officials. A recent Houston Chronicle investigation found that “police have been nearly immune from criminal charges in shootings” in Houston and other large cities in recent years. In Harris County, Texas, for example, grand juries haven’t indicted a Houston police officer since 2004; in Dallas, grand juries reviewed 81 shootings between 2008 and 2012 and returned just one indictment.

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Read more about the article On Being Primed For Worse

On Being Primed For Worse

Haven’t we been gearing up for some kind of O.K. Corral showdown pretty much since the announcement that there would be a grand jury? Haven’t we been gearing up for some kind of O.K. Corral showdown pretty much since the announcement that there would be a grand jury? Sure looked like we expected what we got. [More . . . ]

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