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Changes for Consumer Suits Against Banks on the Horizon

The Bureau of Consumer Financial Protection recently issued a proposed rule that would restore consumers' rights to bring class-action lawsuits against financial firms, such as banks and credit card companies. The proposed rule would prevent enforcement of arbitration clauses requiring consumers to present their disputes to private arbitrators favorable to the financial firms.

The proposed rule follows the Bureau of Consumer Financial Protection's March 2015 Report to Congress outlining the impacts of forced arbitration clauses on disputes between consumers and their financial institutions. For years, banks, credit card companies, and other financial institutions have forced arbitration clauses on their customers that prevent consumers from suing in court. Instead, consumers whose financial institutions require arbitration clauses are must present disputes in arbitration under rules favorable to the financial institutions. Importantly, many arbitration clauses also prohibit consumers from suing together or presenting a class action suit. This has the effect of limiting the exposure faced by financial institutions accused of wrongdoing to only those consumers who have the resources to present their claims in arbitration. Additionally, financial institutions routinely require that arbitrated disputes be confidential, which prevents public disclosure of corporate wrongdoing and keeps the arbitration decisions, such as who won and who lost, a secret.

The Bureau of Consumer Financial Protection's proposed rule would help restore consumers' right to have their dispute decided by a jury of their peers. The Bureau is currently seeking public comment on the proposed rule. Should it become law, the new rule would provide consumers with a day in court, help deter bad conduct by financial institutions, and increase transparency in the dispute process.

If you or someone you know is in need of an experienced team of consumer attorneys, contact Abraham, Watkins, Nichols, Sorrels, Agosto & Friend by calling 713-222-7211 or toll free at 1-800-870-9584.

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  • 2016-2017 Equal Access to Justice Champion

    The Equal Access to Justice Champions Program was started by the Houston Bar Association in 2006, to help ensure placement of Houston Volunteer Lawyers cases with pro bono volunteers. Originally, firms were tiered according to size, and firms within each tier committed to accept a certain number of pro bono cases from HVL each year for five years.

  • The National Trial Lawyers | Top 100 Trial Lawyers

    The National Trial Lawyers: Top 100 is an invitation-only organization composed of the premier trial lawyers from each state or region who meet stringent qualifications as civil plaintiff and/or criminal defense trial lawyers. Selection is based on a thorough multi-phase objective and uniformly applied process which includes peer nominations combined with third-party research.

  • Million Dollar Advocates Forum

    Established in 1993, the Million Dollar Advocates Forum (which includes the Multi-Million Dollar Advocates Forum) is one of the most prestigious groups of trial lawyers in the United States. Membership is limited to attorneys who have won million and multi-million dollar verdicts and settlements. There are over 4000 members throughout the country. Fewer than 1% of U.S. lawyers are members.

  • Recognized by Best Lawyers America | Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz | 2017

    Recognition by Best Lawyers is based entirely on peer review. Their methodology is designed to capture, as accurately as possible, the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area.

  • Lead Counsel Rated

    In order to earn the Lead Counsel Rating, an attorney must not only demonstrate significant legal experience, but must also receive multiple peer recommendations advocating his or her ability. This is a key component in the screening process.

  • Texas Super Lawyers | Texas Monthly

    Each year, Super Lawyers recognizes the top lawyers in Texas via a patented multiphase selection process involving peer nomination, independent research and peer evaluation. The Texas lawyers who receive the highest point totals during this selection process are further recognized in Texas Super Lawyers Top Lists.

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