On Monday, October 3, Hillary Clinton noted that she plans to reform business regulations in response to Wells Fargo’s fraudulent actions during her rally in Toledo, Ohio. Clinton claimed that the company was “bullying thousands of employees into committing fraud against unsuspecting customers.”
Clinton’s plan of action, according to CNN Money, was to provide assistance to the Consumer Financial Protection Bureau (CFPB). This agency, along with two other regulators, was responsible for fining Wells Fargo $180 million. Clinton stated that she would “give [the agency] the tools and authorities” to protect the rights of consumers to pursue claims in court.
Clinton stated that she planned to limit the usage of “arbitration clauses” in contracts with consumers. This action is in light of the fact that many Wells Fargo customers were unable to sue the company in court due to the arbitration clauses found in the fine print of Wells Fargo consumer contracts.
What Are Arbitration Clauses?
Arbitration clauses, in simple terms, are specific clauses found in the fine print of many companies that limit the ability of workers and consumers to seek a legal claim against the company in court. Specifically, arbitration laws allow companies to solve most disputes internally and in a short amount of time. Arbitration clauses cannot be used in cases of employment discrimination or other civil or criminal disputes.
However, a downside to arbitration laws is that workers and consumers are not allowed to seek a formal hearing against their company in a Court of Law (in most cases). In fact, it is not uncommon for companies to hire their own arbitrators to rule on internal cases. These arbitrators do not even need to have any legal training, or base their rulings on legal grounds. Although, arbitration clauses, their limits, and their usage varies from state to state.
The underlying point is that Hillary Clinton plans on limiting companies’ ability to evade court hearings because of these fine print clauses. This is a larger issue than most people realize, as there are currently 36 million employees (which accounts for about one-third of the US workforce) that are under arbitration contracts. As Clinton stated, “We can’t let corporations like Wells Fargo use these fine print ‘gotchas’ to escape accountability.”
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