You soon may be able to sue your bank. Watch Wall Street heads explode

The last time you signed a contract for a cell phone plan, a bank account, or a credit card, you probably signed away your right to go to court if that company cheated you. That’s because most contracts for financial products contain forced arbitration clauses buried deep in the fine print. These clauses prohibit consumers from protecting themselves in court, and they make it a lot easier for financial institutions to get away with cheating their customers.” —Sen. Elizabeth Warren, October 2015.

In a move The New York Times calls “the biggest that the agency has made since its inception in 2010,” the Consumer Financial Protection Bureau Thursday proposed a rule that would bar mandatory arbitration clauses in contracts with financial firms. Since it requires no congressional approval, the rule quite likely will go into effect after a 90-day public comment period in which opposition from business groups will no doubt be extensive, loud and bullshitty. (If you’d like to comment, you can choose a method here.) Foes of the rule, which could cost firms billions, include the U.S. Chamber of Commerce:

“The proposed rule is a wolf in sheep’s clothing,” the U.S. Chamber of Commerce said in a statement. “Now the agency designed to protect consumers is proposing a rule that will end up hurting them.”
Yadda, yadda, propaganda.

The widely used arbitration clauses effectively deny consumers their day in court by keeping them from using class-action lawsuits, which are the only truly effective means they have of fighting firms that engage in deceitful and sometimes illegal practices. The CFPB stated Thursday in a release published on its website:

“Signing up for a credit card or opening a bank account can often mean signing away your right to take the company to court if things go wrong,” said CFPB Director Richard Cordray. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them. Our proposal seeks comment on whether to ban this contract gotcha that effectively denies groups of consumers the right to seek justice and relief for wrongdoing.”
In a year-long investigation, Jessica Silver-Greenberg and otherTimes reporters undertook a detailed study of arbitration clauses that the financial industry keeps arguing are a boon for consumers. The investigative team found the claims to be bogus. And they confirmed—no surprise—that it’s the person disputing small amounts, say, for late fees and overdraft charges, that gets hurt worst. From 2010 to 2014, the Times found, just 505 consumers blocked from class action suits went to arbitration over disputes of $2,500 or less. Yet tens of millions of Americans have signed financial contracts that include arbitration clauses.