Press Release: Mainers Should be Protected From Payday Lenders Seeking to Enforce Shady Provisions in Shadows of Forced Arbitration

August 7, 2017

FOR IMMEDIATE RELEASE

August 7, 2017

CONTACT:

Jody Harris

Jharris@mecep.org

(207) 620-1105

Mainers  Should be Protected From Payday Lenders Seeking to Enforce Shady Provisions in Shadow of Forced Arbitration

MECEP urges Maine’s congressional delegation to support CFPB’s efforts to limit use of forced arbitration

AUGUSTA, MAINE (August 3, 2017) – Last month, the Consumer Financial Protection Bureau (CFPB) issued a new rule prohibiting the use of mandatory arbitration clauses to bar consumers from joining class-action lawsuits against payday lenders engaged in wrongdoing. As expected, the new rule is facing backlash from those who profit from enforcing shady provisions outside of the courtroom and in the shadows of forced arbitration. The Maine Center for Economic Policy (MECEP) urges Maine’s congressional delegation to stand behind the CFPB’s new rule to protect Maine’s consumers by making sure they have access to justice.
 
“Payday lenders force arbitration onto consumers for a reason,” said Jody Harris, associate director at MECEP. “It’s divide and profit. When a consumer goes up against a payday lender and their lawyers alone, behind closed doors, consumers often lose and lenders win and walk away with zero public accountability.”
 
Senator Susan Collins recognized the danger that payday lenders pose to Maine consumers when she stated in her 2013 Special Committee on Aging opening statement that, “Too often, borrowers who get trapped in a cycle of debt are then subjected to aggressive-even abusive-collection practices by some payday lenders.”
 
What makes this problem worse are fine print, forced arbitration clauses that bar consumers from joining together and holding payday lenders accountable in a court of law.  “We encourage Maine’s congressional delegation to stand behind the CFPB and the rule against forced arbitration,” said Harris. “Maine is a leader when it comes to protecting consumers from payday lending. We can take the next step and advocate for stronger consumer protections at the federal level by supporting the work of the CFPB.”