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Op-Ed

Credit Arbitration Clauses Favor Corporations

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Charlene Crowell

By Charlene Crowell
NNPA Columnist

 
Although arbitration is often associated with labor unions, millions of consumers are also affected by it and don’t even know it. Often consumers find the extremely small print of credit agreements difficult to read. Others become bewildered by the legal jargon embedded in these clauses.

In either case, consumers should take note. The adage, ‘the devil is in the details’ still holds true.

A new report released by the Consumer Financial Protection Bureau (CFPB) found that more than three in four consumers surveyed did not know whether they were subject to a credit arbitration clause. Checking accounts, credit cards, mobile wireless providers, payday loans and prepaid cards were the six financial areas that CFPB analyzed.

Even worse, CFPB determined that despite arbitration clauses dominant presence in consumer credit agreements, the clauses work more in favor of corporations than consumers. All too often, credit terms are seldom negotiable. Only in a few instances are consumers given a one-time chance to opt out of these terms. Additionally, when disputes arise, consumers seldom choose the arbitrator and creditors typically pay for arbitration services.

As consumers accept credit terms, they often forfeit their rights to legal action as an individual or as part of a class action. In short, from a consumer perspective the choice becomes ‘take it or leave it’.

“Tens of millions of consumers are covered by arbitration clauses, but few know about them or understand their impact,” said Richard Cordray, CFPB Director. “Our study found that these arbitration clauses restrict consumer relief in disputes with financial companies by limiting class actions that provide millions of dollars in redress each year.”

In reaction to CFPB’s new report, business lobbyists and organizations spoke up on how arbitration remains a cost-saving tool and as a result, helps to preserve affordability in financial services.

Yet many consumer advocates held a near-opposite view.

“Forced arbitration isn’t an alternative forum for resolving disputes; it’s a get-out-of-jail-free card for corporations,” said Ellen Taverna, legislative director of the National Association of Consumer Advocates.

“The findings of the CFPB study are crystal clear,” said David Seligman, an attorney with the National Consumer Law Center. “These clauses are written by corporations to set up a secret and lawless process that prevents consumers from holding corporations accountable for unlawful conduct.”

Over a five-year period, CFPB analyzed evidence from consumer contracts, court data, surveys and more to determine whether arbitration clauses offered a fair and transparent resolution of consumer complaints in six consumer financial markets. The findings were as eye-opening as they were broad in impact.

Payday loans and prepaid cards were found to have the highest usage of arbitration clauses, at 99 and 92 percent, respectively. It should be noted that in California and in Texas, two states with some of the highest numbers of payday stores, CFPB obtained data on more than 99 percent of store locations.

The remaining credit areas studied still made significant use of arbitration agreements: mobile wireless (88 percent), private student loans (86 percent), credit cards (53 percent) and checking accounts (44 percent).

Other CFPB findings include:

• Over the five years studied, 1,847 arbitration disputes were filed but the total amount of relief and debt forbearance that consumers received was less than $400,000;

• Corporations obtained decisions that required consumers to pay $2.8 million, largely for disputed debts during the same period;

• Nearly 34 million consumers could have been eligible for at least $1.1 billion in cash payments; and

• At the same time, among those not affected by forced arbitration clauses, at least 160 million class action members, were eligible for $2.7 billion in cash, in-kind relief, expenses and fees through federal legal proceedings.

“Companies claim that arbitration is simpler, easier, and cheaper – but they fail to mention that forced arbitration rarely provides the impartiality or meaningful review that a consumer can get in a court of law,” says Mitria Wilson, a vice-president with the Center for Responsible Lending.

“In the worst examples, we’ve seen consumers being asked to travel to faraway places to try to enforce their rights only to find out that the ‘impartial’ arbiters were selected exclusively by the companies that their dispute is with. These proceedings are virtually impossible to get overturned through a court of law –even if blatant mistakes are made.”

In 2010 and as part of the Dodd-Frank Wall Street Reform Act, Congress directed CFPB to conduct a study and provide a report on the use of pre-dispute arbitration clauses in consumer financial contracts. Dodd-Frank also banned the use of arbitration clauses in most residential mortgage loans. The issue of arbitration’s effects on consumers was also brought before Congress in 2007 when it enacted the Military Lending Act.

“This report is an important one – and we hope it serves as a precursor to a strong and robust rule prohibiting this practice,” concluded Wilson.

 

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at Charlene.crowell@responsiblelending.org.

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Commentary

A Politician’s Shameless Bigotry

Witness North Carolina Lt. Gov. Mark Robinson. He abuses his position of authority to insult and demean people. But when he gets criticized for making harmful comments, he whines that he’s the real victim. 

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There’s an old saying about bullies: they can dish it out, but they can’t take it.

Witness North Carolina Lt. Gov. Mark Robinson. He abuses his position of authority to insult and demean people. But when he gets criticized for making harmful comments, he whines that he’s the real victim.

People For the American Way’s Right Wing Watch recently began reporting on Robinson’s cruel and offensive comments. This summer, Robinson told one audience that Christians must take control of public schools because “there’s no reason anybody anywhere in America should be teaching any child about transgenderism, homosexuality, any of that filth.” In another speech, Robinson mocked transgender people and denounced the transgender rights movements as “demonic” and “full of the spirit of antichrist.”

Fortunately, a lot of people have called Robinson out. North Carolina Gov. Roy Cooper called Robinson’s comments “abhorrent.” The White House called them “repugnant and offensive.” Multiple state legislators have called on him to resign.

Robinson should be ashamed of himself. But he’s not. He is puffed up with pride about promoting bigotry. He is promising to “double down.” And that’s dangerous. Robinson’s comments send a message to students and everyone else that trans people are not worthy of being treated with respect or dignity.

Robinson’s comments are part of a long and ugly history of politicians smearing LGBTQ people as threats to children. Those smears promote hatred and violence. Deadly violence against transgender people, especially Black trans women, has been on the rise in recent years.

Robinson’s attacks are also part of a broader right-wing campaign to demonize public schools for teaching about racism and promoting acceptance of LGBTQ students. Robinson says schools are teaching students “how to hate America” and “how to go to Hell.”

He has defended himself by claiming that inappropriate materials are being “forced” on children in classrooms, but his charges don’t hold up to scrutiny. Some of the books that he complains about are reportedly not being taught in classrooms but are available in some high school libraries.

 

More importantly, Robinson claims to oppose “indoctrination” in public schools. But in his remarks to right-wing political activists in September, he said that school shootings would be prevented if public schools taught students, “Jesus Christ is the way and the light, and only through him can you receive salvation.”

In fact, Robinson has a message for the millions of Americans who are not Christians: they don’t belong. At a gathering of religious-right political activists in September, Robinson declared that the United States is and always will be a Christian nation. He added, “If you don’t like it, I’ll buy your plane, train, or automobile ticket right up out of here. You can go to some place that’s not a Christian nation.”

I am a Christian. I revere the role the Black church has played in moving the U.S. toward justice. I am proud to be working side by side with religious leaders who are bringing their moral authority and prophetic voices to the struggle to defend voting rights. I was proud to be arrested alongside these leaders recently as we demonstrated at the White House.

But I don’t want public schools to teach religious doctrine. And I don’t want public officials misusing religion as an excuse for using cruelty to divide us.

Like a lot of politicians, Robinson clearly has a very high opinion of himself. At a political conference in September, he compared himself to Jesus Christ and John the Baptist. He also made it clear that he would like to be North Carolina’s next governor. That’s the last thing the people of North Carolina need.

A politician who uses their office to promote bigotry doesn’t deserve to hold office.

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Op-Ed

Compassion in Oakland on Display in “This Is Life With Lisa Ling” Episode on Vincent Chin

The show focused on the Vincent Chin case, the famous Asian American hate crime that took place in Detroit in 1982.

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photo courtesy of broadway world

African Americans and Asian Americans working together in the past and the present? There were some good examples on last Sunday’s premier episode of CNN’s “This is Life with Lisa Ling.”

The show focused on the Vincent Chin case, the famous Asian American hate crime that took place in Detroit in 1982.

I’ve covered or written about the case most of my journalistic career. This CNN episode is a ‘must see,’ especially for younger people, or people who may still be wondering what the big deal is about Vincent Chin.

I’ve always admired Ling’s work. But what makes the episode stand out is her choice to tell Chin’s story through the life of author Helen Zia.

Helen and I are friends. And I will never forget all the kind words she’s said about me at times in my life when things were on the line. But I didn’t realize she worked in the auto industry before she made her mark as a journalist and author.

I’ve talked to Helen over the years about Chin, and you can hear our conversation on my 2017 podcast.

https://www.aaldef.org/blog/emil-guillermo-lessons-from-vincent-chin-murder-35-years-ago-podcast-helen-zia/

On last Sunday’s CNN show, I never saw Helen tell the Chin case so clearly and eloquently. Maybe that’s because in most stories about Chin, the devastating impact of Japan on the Detroit auto industry in the late ’70s and early ‘\’80s is usually covered in a paragraph. This Ling episode gives you a sense of that trade war through news clips of the times, and lets you see how easily it could have fueled the animus that erupted in the Chin case.

The violence was irrational as well, since Chin was Chinese, not Japanese. But that didn’t matter to auto worker Ronald Ebens, who murdered Chin.

The episode has Ebens in an old film clip saying he fully expected jail time for beating Chin to death. The fact that he didn’t serve time at all further shows the travesty in the case.

The episode also covers what Zia shared with me in 2017—that the ACLU and the National Lawyers Guild originally balked at supporting the efforts of Asian Americans to seek justice at the federal level.

“They said, ‘you know, this has nothing to do with race because Vincent Chin is not Black,’” Zia said in the episode. “So civil rights laws only protect Black people, and we said ‘No, Vincent Chin’s civil rights should be protected as well.’”

It’s an eye-opening realization that in 1982, less than 20 years after the Civil Rights Act, the nation was still in a Black/white paradigm that excluded Asian Americans.

But Zia’s advocacy group, American Citizens for Justice, got support from the Black community, notably the Rev. Jesse Jackson.

“We must redefine America,” Jackson said in a video clip. “So, everyone fits in the rainbow somewhere.”

It was the signal for a coalition to make its pitch to the Justice Department to take action in the Chin case.

“Every religion and walk of life came together,” said Zia. “Black, white, Latinx, LGBT, Jewish, Muslim saying ‘we are with you, we stand for you.’”

It’s the spirit of coalition we still need to this day. Sure enough, there’s a segment featuring a group, Compassion in Oakland, that reaches out to help escort Asian seniors in Oakland’s Chinatown.

“I grew up in this area,” says Kenyatta, 22, a volunteer, in the episode. “Seeing all the attacks on the news was breaking my heart.”

It’s a nice cap to the entire episode, which links Chin’s death, to Asian hate, to a community’s response. It shows how good things can happen when BIPOC communities work in the spirit of coalition and cooperation.

We can ease each other’s pain, if we care for one another first.

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

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Black History

Ambassador Ruth A. Davis Pioneered Diversity in Foreign Service

UC Berkeley Grad Continues to Bring International Economic Empowerment for Women

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Ambassador Ruth A. Davis (left) is meeting with Secretary of State, Hillary Clinton.

Ambassador Ruth A. Davis was recently named as a distinguished alumna by the School of Social Welfare at the University of California, Berkeley. 

She also has been honored by the U.S. State Department when a conference room at the Foreign Service Institute in Virginia was named in honor of her service as director of the Institute. She was the first African American to serve in that position.

Davis, a graduate of Spelman College received a master’s degree from UC Berkeley in 1968.

Congresswoman Barbara Lee, also a graduate of the School of Social Welfare, now chairs the House Appropriations Committee on State, Foreign Operations and Related Programs. She praised Ambassador Davis as “a trailblazing leader and one of the great American diplomats of our time. Over her 40-year career, she had so many ‘firsts’ on her resume: the first Black director of the Foreign Service Institute, the first Black woman Director General of the Foreign Service, and the first Black woman to be named a Career Ambassador, to name just a few.

“She served all over the world, from Kinshasa to Tokyo to Barcelona, where she was consul general, and to Benin, where she served as ambassador,” Lee continued. “ I am so proud of her many accomplishments. She has represented the best of America around the world, and our world is a better place because of her service.”

During Davis’ 40-year career in the Foreign Service, she also served as chief of staff in the Africa Bureau, and as distinguished advisor for international affairs at Howard University. She retired in 2009 as a Career Ambassador, the highest-level rank in Foreign Service.

Since her retirement, Ambassador Davis has served as the chair (and a founding member) of the International Women’s Entrepreneurial Challenge (IWEC), an organization devoted to promoting women’s economic empowerment by creating an international network of businesswomen.

She also chairs the selection committee for the Charles B. Rangel International Affairs Fellowship at Howard University’s Ralph Bunche International Affairs Center, where she helps to oversee the annual selection process. Finally, as vice president of the Association of Black American Ambassadors, she participates in activities involving the recruitment, preparation, hiring, retention, mentoring and promotion of minority Foreign Service employees.

Gay Plair Cobb, former Regional Administrator of the Women’s Bureau, U.S. Department of Labor in the Atlanta, and San Francisco offices, was Ambassador Davis’ roommate at UC Berkeley. Cobb said, “Ruth always exhibited outstanding leadership and a determined commitment to fairness, equal opportunity and activism, which we engaged in on a regular basis.”

Davis has received the Department of State’s Superior Honor Award, Arnold L. Raphel Memorial Award and Equal Employment Opportunity Award; the Secretary of State’s Achievement Award (including from Gen. Colin Powell); the Director General’s Foreign Service Cup; two Presidential Distinguished Service Awards; and Honorary Doctor of Laws from Middlebury and Spelman Colleges.

A native of Atlanta, Davis was recently named to the Economist’s 2015 Global Diversity List as one of the Top 50 Diversity Figures in Public Life and is the recipient of the American Foreign Service Association’s Lifetime Contributions to American Diplomacy Award.

 

The Oakland Post’s coverage of local news in Alameda County is supported by the Ethnic Media Sustainability Initiative, a program created by California Black Media and Ethnic Media Services to support community newspapers across California.

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