[Congressional Record Volume 162, Number 61 (Wednesday, April 20, 2016)]
[Extensions of Remarks]
[Page E533]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                           FORCED ARBITRATION

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                               speech of

                           HON. KEITH ELLISON

                              of minnesota

                    in the house of representatives

                        Thursday, April 14, 2016

  Mr. ELLISON. Mr. Speaker, I stand with Representatives Johnson, 
Sanchez, and my other colleagues to discuss a well-known scourge on the 
rights of everyday Americans: forced arbitration clauses.
  People talk about how the rules are rigged. They say the deck is 
stacked in favor of powerful interests. Forced arbitration clauses are 
a perfect example of an unfair system. Powerful corporations rig the 
rules to make it more difficult for people to hold companies 
accountable for wrong doing.
  Nearly all companies add non-negotiable clauses in contracts that 
people are required to sign when we open a bank account, get a credit 
card or a cell phone or choose a financial advisor. Virtually any 
product and service that requires we sign a contract that includes 
fine-print will limit our ability to seek damages in open court.
  If consumers have a complaint, we are limited to secret arbitration 
forums. These arbitration forums are controlled by the corporation. The 
corporations decide the venue and the arbitrator. Even if the 
arbitrator makes a terrible ruling or makes egregious errors, the 
ruling likely cannot be appealed or reversed. In fact, arbitrators' 
decisions in prior cases are not publicly available.
  How did we get to this point? How is it possible that nearly all 
consumer and investment contracts include forced arbitration clauses? 
Why are consumers forced to resolve disputes after they arise in secret 
courts, not in the public courts?
  We should look across the street. No entity has done more to expand 
forced arbitration clauses than the Supreme Court. Numerous anti-
consumer rulings have restricted people's freedom to take a company to 
court.
  Last year the Supreme Court ruled that DirecTV California customers 
could not band together to fight an early termination fee assessed by 
DirecTV. Instead, each customer had to file individually and use 
arbitration. They could not seek a class action lawsuit.
  In 2013, American Express v. Italian Colors preserved the monopoly 
powers of American Express so it could continue to charge retailers 
high fees. Retailers who had sought a class action lawsuit were 
restricted by arbitration clauses in their contracts.
  In 2011, AT&T Mobility v Concepcion had the same outcome; people who 
were offered a ``free cell phone'' realized they were actually charged 
$30. Consumers sought damages as a class but the Supreme Court ruled 
that the customers had to pursue their claims individually through 
arbitration.
  As you would expect, these anti-consumer rulings were decided on 
ideological lines. In fact, the late Justice Antonin Scalia wrote many 
of these decisions which were unfair or onerous to consumers.
  But we are not giving up. We are pushing back hard against these 
mandatory arbitration contracts.
  Congress barred forced arbitration clauses in residential mortgage 
terms.
  Military members now have the right to go to court for disputes 
involving many types of loans.
  Small-business auto dealers can choose to go to court when locked in 
disputes with the big auto manufacturers. Unfortunately, most auto 
dealers have deprived their own customers of this benefit.
  The Consumer Financial Protection Bureau is working on a rule that 
could curb mandatory arbitration in consumer contracts. The CFPB could 
restore our ability to join our claims together to hold financial 
companies accountable when they break the law.
  But there is still more work to do. The Securities and Exchange 
Commission has the authority to eliminate forced arbitration clauses 
that brokerage firms and financial advisors require their customers 
sign. But the SEC hasn't acted.
  Therefore, I have sponsored legislation, the Investor Choice Act, 
(HR. 1098). My bill restores the rights of investors who are simply 
trying to save for retirement and other life goals. The bill says 
investors must have access to court to seek justice if advisors and 
brokers, who typically have the incentive to charge outsized 
commissions and fees, do not act in their customers' best interests. 
The bill has 21 cosponsors.
  I am also a proud cosponsor of the Arbitration Fairness Act, Mr. 
Johnson's bill eliminates forced arbitration for all consumer and 
worker disputes;
  I am also a cosponsor of the Court Legal Access & Student Support 
(CLASS) Act. This bill bans forced arbitration and class action 
prohibitions from college enrollment contracts.
  Minnesota's own attorney general Lori Swanson has been a leader in 
trying to level the playing field for all Minnesotans. She worked to 
stop a corrupt arbitration provider from operating its business against 
consumers across the country; and she has urged federal regulators to 
eliminate arbitration clauses from nursing home contracts.
  In closing, let me say, my colleagues and I are not seeking to do 
away with arbitration as a way for parties to work out their problems. 
We just think arbitration should be voluntary not mandatory.
  I simply ask ``If arbitration is so fair, why force it? Why not 
present it as an alleged ``fair'' option when a dispute has arisen--
where both parties can consider all alternatives and agree on an 
appropriate forum?''
  We know why: Because companies like forced arbitration clauses 
because they are a perfect tool to avoid liability for their actions.
  If you want a fair system, if you want people to be able to 
accumulate wealth, then we need to stop these forced mandatory 
arbitration clauses in consumer and investor contracts.

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