Chat live now!
Members of the firm'

Reputation for Excellence

New Law Would Limit Rights of Consumers to File Class Action Lawsuits Against US Banks

Request Consultation / 856-437-4080
categories

New Law Would Limit Rights of Consumers to File Class Action Lawsuits Against US Banks

class-action-lawsuits

A bill currently sitting on President Trump’s desk would drastically limit the rights of consumers to file lawsuits against banks, credit card companies, and other lenders.

The legislation was approved by the U.S. Senate (link to article) in what is seen by many as a major blow to the authority of the Consumer Financial Protection Bureau. In 2015, the consumer bureau, a federal watchdog which has been tasked with monitoring the nation’s financial institutions since the financial crisis, finalized a rule that gave consumers the legal right to file class action lawsuits against banks and lenders. That rule was intended to provide an avenue for consumers to seek redress when a minor dispute didn’t justify the high cost of seeking justice through individual lawsuits or through arbitration. Instead, consumers could join together (as a “class”) in the same lawsuit and seek redress through the legal system.

For years prior to the implementation of this rule, US banks managed to avoid class action suits by including mandatory arbitration requirements in consumer agreements. Needless to say, the new rule did not sit well with lending institutions – and they began to lobby Congress to roll back the rule change.

The Consequences of Allowing Banks to Impose Mandatory Arbitration Requirements

If, and when, President Trump approves the bill – as he is expected to do – financial institutions will greatly benefit. That’s because they will no longer be exposed to class action lawsuits in civil court. This could have major implications for consumers who were affected by the recent Wells Fargo fake account scandal and the recent Equifax data breach. (Some estimates indicate that as many as 145 million Americans may have had their personal data compromised by the cyberattack on Equifax.) Those consumers would no longer be able to join class action lawsuits against the potentially liable financial institutions. Instead, consumers would have to rely on arbitration.

So, what is the bottom line for consumers? Consumer Financial Protection Bureau Director Richard Cordray believes that the new law “preserves a two-tiered justice system” that provides banks and lenders with a major advantage over consumers in legal disputes. For some perspective, consider that there were 411 cases against banks and lenders in the U.S. between 2010 and 2012. (These cases involved disputes over credit cards, checking accounts, student loans, and other types of loans.) The total amount of relief provided by arbitrators was $361,540. During the same time period, there were 187 class action lawsuits filed against banks under similar circumstances. Those cases resulted in settlements totaling approximately $1.6 billion. This is a significant financial difference that should underscore precisely why banks prefer mandatory arbitration to class action lawsuits when disputing claims by consumers.

 

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.

Kathryn N.

Thank you from the bottom of my heart. Mr. Andres is reliable, honest, driven, knowledgeable, compassionate and highly respected among colleagues and medical professionals. He stands by his word and can be trusted. He and Gail have fought for me during times when I wasn’t strong enough to fight for myself. The Andres & Berger law firm understands Complex Regional Pain Syndrome (CRPS). Mr. Andres thank you for your support and guidance over the years. I consider you my fierce, tenacious attorney and dear friend.

Mike V.

Mike Berger of Andres & Berger handled my case over a six year period. He and the team examined every detail to get the best outcome. They were honest, candid and communicative throughout the whole process. It was a long ordeal but could not have been handled more professionally. I highly recommend.

Yadira R.

I just want to say thank you for what you have done for me and my family throughout the years. You made us feel like family, not just clients. You were always very detailed when it came to our cases and tried everything in your power to get us all the help we needed.

Gregory W.

Our family appreciated your unfailing attention to detail. There were last minute snags, we seldom worried that something would fall through the cracks, but you anticipated every contingency. Your firm demonstrated a veracity for the truth, a strong work ethic and overall impeccable character in dealing with our case.

01 / 04

case results

View All Case Results

$9.2million

Settlement/

Anesthesia Malpractice

$1.6million

Settlement/

Birth Injury

$900thousand

Recovery/

Nursing Home Malpractice

$10.0million

Settlement/

Gas Explosion

$4.6million

Settlement/

Auto Accident

$855thousand

Settlement/

Slip & Fall

Areas We Serve

  • Burlington County
  • Bass River
  • Beverly
  • Bordentown City
  • Bordentown Township
  • Burlington City
  • Burlington Township
  • Chesterfield
  • Cinnaminson
  • Delanco
  • Delran
  • Eastampton
  • Edgewater Park
  • Evesham
  • Fieldsboro
  • Florence
  • Hainesport
  • Lumberton
  • Mansfield
  • Maple Shade
  • Medford Lakes
  • Medford Township
  • Moorestown
  • Mount Holly
  • Mount Laurel
  • New Hanover
  • North Hanover
  • Palmyra
  • Pemberton Borough
  • Pemberton Township
  • Riverside
  • Riverton
  • Shamong
  • Southampton
  • Springfield
  • Tabernacle
  • Washington Township
  • Camden County
  • Ashland
  • Audubon
  • Audubon Park
  • Barclay CDP
  • Barrington
  • Bellmawr
  • Berlin
  • Blackwood
  • Brookfield
  • Brooklawn
  • Camden
  • Cherry Hill
  • Chesilhurst
  • Clementon
  • Collingswood
  • Echelon
  • Ellisburg
  • Gibbsboro
  • Glendora
  • Gloucester City
  • Golden Triangle
  • Greentree
  • Haddon Heights
  • Haddonfield
  • Hi-Nella
  • Kingston Estates
  • Laurel Springs
  • Lawnside
  • Lindenwold
  • Magnolia
  • Merchantville
  • Oaklyn
  • Pine Hill
  • Pine Valley
  • Runnemede
  • Somerdale
  • Springdale
  • Stratford
  • Tavistock
  • Wood-Lynne
  • Cape May County
  • Avalon
  • Cape May Point
  • Cape May
  • Dennis Township
  • Lower Township
  • Middle Township
  • North Wildwood
  • Ocean City
  • Sea Isle City
  • Stone Harbor
  • Upper Township
  • West Cape May
  • West Wildwood
  • Wildwood Crest
  • Wildwood
  • Woodbine
  • Cumberland County
  • Bridgeton
  • Cedarville
  • Fairton
  • Laurel Lake
  • Millville
  • Port Norris
  • Rosenhayn
  • Seabrook Farms
  • Shiloh
  • Vineland
  • Gloucester County
  • Beckett
  • Clayton
  • Gibbstown
  • Glassboro
  • Mullica Hill
  • National Park
  • Newfield
  • Oak Valley
  • Paulsboro
  • Pitman
  • Richwood
  • Swedesboro
  • Turnersville
  • Victory Lakes
  • Wenonah
  • Westville
  • Williamstown
  • Woodbury
  • Woodbury Heights
  • Mercer County
  • Groveville
  • Hamilton Square
  • Hightstown
  • Hopewell
  • Lawrenceville
  • Mercerville
  • Pennington
  • Princeton
  • Princeton Junction
  • Robbinsville
  • Trenton
  • Twin Rivers
  • White Horse
  • Yardville
  • Ocean County
  • Barnegat
  • Barnegat Light
  • Bay Head
  • Beach Haven
  • Beach Haven West
  • Beachwood
  • Cedar Glen Lakes
  • Cedar Glen West
  • Crestwood Village
  • Dover Beaches North
  • Dover Beaches South
  • Forked River
  • Harvey Cedars
  • Holiday City South CDP
  • Holiday City-Berkeley CDP
  • Holiday Heights
  • Island Heights
  • Lakehurst
  • Lakewood
  • Lavallette
  • Leisure Knoll
  • Leisure Village
  • Leisure Village East
  • Leisure Village West
  • Manahawkin
  • Mantoloking
  • Mystic Island
  • New Egypt
  • North Beach Haven
  • Ocean Acres
  • Ocean Gate
  • Pine Beach
  • Pine Lake Park
  • Pine Ridge at Crestwood
  • Point Pleasant Beach
  • Point Pleasant
  • Seaside Heights
  • Seaside Park
  • Ship Bottom
  • Silver Ridge
  • South Toms River
  • Surf City
  • Toms River
  • Tuckerton
  • Vista Center
  • Waretown
  • Salem County
  • Alloway
  • Carneys Point
  • Elmer
  • Hancocks Bridge
  • Olivet
  • Pedricktown
  • Penns Grove
  • Pennsville
  • Quinton
  • Salem
  • Woodstown
  • Philadelphia
  • Bella Vista
  • Callowhill
  • Chinatown
  • East Passyunk
  • Fairmount
  • Fishtown
  • Graduate Hospital
  • Logan Square
  • Market East
  • Midtown Village
  • Northern Liberties
  • Old City
  • Pennsport
  • Powelton Village
  • Queen Village
  • Rittenhouse Square
  • Society Hill
  • Spring Garden
  • Spruce Hill and Cedar Park
  • University City
  • Washington Square West
  • Bucks County
  • Bristol
  • Brittany Farms - The Highlands CDP
  • Chalfont
  • Churchville
  • Cornwells Heights
  • Croydon
  • Doylestown
  • Dublin
  • Eddington
  • Fairless Hills
  • Feasterville
  • Hulmeville
  • Ivyland
  • Langhorne
  • Langhorne Manor
  • Levittown
  • Milford Square
  • Morrisville
  • New Britain
  • New Hope
  • Newtown
  • Newtown Grant
  • Penndel
  • Perkasie
  • Plumsteadville
  • Quakertown
  • Richboro
  • Richlandtown
  • Riegelsville
  • Sellersville
  • Silverdale
  • Spinnerstown
  • Trevose
  • Trumbauersville
  • Tullytown
  • Village Shires
  • Warminster Heights
  • Woodbourne
  • Woodside
  • Yardley
  • Montgomery County
  • Ambler
  • Arcadia University CDP
  • Ardmore
  • Audubon
  • Blue Bell
  • Bridgeport
  • Bryn Athyn
  • Bryn Mawr
  • Collegeville
  • Conshohocken
  • Eagleville
  • East Greenville
  • Evansburg
  • Flourtown
  • Fort Washington
  • Gilbertsville
  • Glenside
  • Green Lane
  • Halfway House
  • Harleysville
  • Hatboro
  • Hatfield
  • Haverford College CDP
  • Horsham
  • Jenkintown
  • King of Prussia
  • Kulpsville
  • Lansdale
  • Maple Glen
  • Montgomeryville
  • Narberth
  • Norristown
  • North Wales
  • Oreland
  • Penn Wynne
  • Pennsburg
  • Plymouth Meeting
  • Pottsgrove
  • Pottstown
  • Red Hill
  • Rockledge
  • Royersford
  • Sanatoga
  • Schwenksville
  • Skippack
  • Souderton
  • Spring House
  • Spring Mount
  • Stowe
  • Telford
  • Trappe
  • Trooper
  • West Conshohocken
  • Willow Grove
  • Woxall
  • Wyncote
  • Wyndmoor
Firm Award
Firm Award
Firm Award
Firm Award
Firm Award
Firm Award
Firm Award
Firm Award
Firm Award