By Chris Bruce
Aug. 17 — Consumers want access to the courts in disputes with banks over checking accounts, the Pew Charitable Trusts said in a new report urging speedy action on a Consumer Financial Protection Bureau proposal that would make it easier to file class action suits.
The Aug. 17 report, which was based on basic checking account disclosures by 44 of the 50 largest retail banks in the U.S., offers the latest support for the CFPB's May proposal, which bans mandatory arbitration clauses in contracts for banking accounts, credit cards, student loans and several other types of consumer financial products.
According to Pew, its research on checking accounts highlights the divide between bank policies and customer preferences when it comes to limits on dispute resolution. Almost 9 in 10 consumers want to be able to participate in a group lawsuit, the study said.
“The public wants access to the justice system, including the right to join and pursue a class action, while banks continue to restrict such access,” the report said. “Pew urges the CFPB to expeditiously finalize rules that give consumers the ability to choose how they pursue a dispute, rather than allowing financial institutions to limit their options.”
The report said almost three-quarters of the account agreements studied include clauses that mandate pre-dispute arbitration and prohibit class actions. In addition, 91 percent of the banks studied also bar consumers from having their disputes heard by a jury rather than a judge.
“Overall, more than 90 percent of these banks include at least one provision restricting consumers’ dispute resolution options,” Pew said.
According to Pew, the report was based on a “nationally representative random-digit-dialing” telephone survey of 1,008 adults on attitudes toward arbitration and dispute resolution. Interviews were conducted in late November, 2015. Social Science Research Solutions (SSRS), which conducted the survey, did 504 interviews via cellphone, and 38 in Spanish, according to the report. It said the margin of sampling error is plus or minus 3.8 percent.
The report came just a few days after Democratic attorneys general from 17 states and the District of Columbia said they back the proposal (157 BBD, 8/15/16).
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