Attorneys General from sixteen states, including California, New York, Kentucky, and Maryland, have jointly sent a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray asking the CFPB to protect consumers’ rights to seek redress from financial service providers. The letter voices the need for regulation of “the use of pre-dispute mandatory arbitration clauses in consumer agreements for financial products or services.” Such clauses in financial contracts have become more common, and often require consumers “to waive their right to seek judicial resolution of future disputes (and appeal thereof) in federal or state court,” as well as prohibiting consumers from participating in any class-action lawsuits relating to the financial services or products. The high cost of arbitration and the inability to join a class-action suit that would reduce those costs often prevent consumers from pursuing a claim at all. The Attorneys General state that the result is not only unfair to harmed customers, but it also eliminates or lessens the opportunity to hold companies accountable and “develop judicial precedents that can set preventive standards for corporate conduct.” The letter urges the CFPB to use its authority to protect the public interest through prohibitions, conditions, or limitations on such clauses. To read the complete letter, click here.