Legislative Updates from National Association of Consumer Advocates
February 21, 2010
The following post is excerpted from an email alert from the National Association of Consumer Advocates (NACA).
These are a few of the current legislative issues NACA is working on:
Forced Arbitration
NACA is still working hard to get the Arbitration Fairness Act (AFA) and the Fairness in Nursing Home Arbitration Act out of the House Judiciary Committee.
The AFA now has 108 co-sponsors! We are pushing Congressman Steve Cohen (D-TN), the Chairman of the House Judiciary Committee’s Commercial & Administrative Law Subcommittee, to schedule a vote on the bill during the next several months. Subsequently we will push for a full vote in the Judiciary Committee. The vote in the House is our first priority; however, NACA continues to lobby the Senate as well, to garner support and build momentum.
NACA is also working hard to preserve the proposed language in the Consumer Financial Protection Agency Act of 2009 that addresses forced arbitration. The version that passed the House and is similar in the Senate, enables the Consumer Financial Protection Agency (CFPA) to restrict and/or ban the unfair practice of forced arbitration from financial contracts. In the House there were attempts to strip such language, and we anticipate that we will again be called upon to fight to maintain the language in the Senate.
Homeownership / HAMP
Yesterday, the Treasury Department released January data for the Administration’s Home Affordable Modification Plan (HAMP).
The Administration’s current plan is still clearly not working as we see foreclosures across the U.S. continue to soar. After 11 months, only one in ten homeowners participating in the HAMP program have had their mortgage permanently modified.
In late 2009, NACA and NCLC conducted a survey about the occurrence of foreclosure sales in violation of HAMP. Over 100 NACA members from 24 states participated. The results indicated that foreclosure sales were still a significant problem and in need of a substantial policy solution.
Two weeks ago, NACA organized a call with its Institute for Foreclosure Legal Assistance (IFLA) grantees to discuss the shortcomings of the HAMP program and what they are seeing in the field. NACA is presently drafting a letter to Congress and the Administration explaining the IFLA attorneys’ concerns with HAMP and to set forth recommendations on what is needed to make the program work for homeowners facing foreclosure.
Consumer Financial Protection Agency
As you know, the pending financial reform legislation that would rein in many Wall Street abuses and create an independent CFPA is still being negotiated in the Senate.
NACA just learned that Senator Chris Dodd (D-CT), the Chairman of the Senate Banking Committee, will be releasing a new draft of his proposed financial reform package next week. The fight right now is about the very structure of the CFPA and whether it will maintain independence.
NACA has been meeting with Senate offices to convey that independence in regards to the CFPA requires the agency be independently funded, have independent rulemaking authority over both banks and non-banks, the head of the agency be independently appointed by the President for a specified term and have independent managerial decision making power, and that the agency have examination and enforcement authority that is not subject to approval or veto.
National Aribitration Forum (NAF) to Cease Credit Card and Other Consumer Arbitrations
July 19, 2009
The following is partially excerpted from the BusinessWeek article “Big Arbitration Firm Pulls Out of Credit Card Business.”
In a surprising turn of events, the National Arbitration Forum (NAF) has agreed to stop accepting consumer credit card arbitration suits, Minnesota Attorney General Lori Swanson said on Sunday, July 19.
The Minnesota AG sued the firm on July 14 for consumer fraud, deceptive trade practices, and false advertising.
Under the terms of the settlement, NAF by the end of this week will stop accepting new consumer arbitrations of any kind.
Maryland Consumer Rights Coalition Urges Attorney General to Investigate National Arbitration Forum
July 15, 2009
The following is excerpted from a Maryland Consumer Rights Coalition blog post.
The Maryland Consumer Rights Coalition today asked Maryland Attorney General Douglas F. Gansler to investigate the practices of the National Arbitration Forum (NAF.)
The Minnesota Attorney General sued NAF yesterday for allegedly using illegal and dishonest practices that harm consumers.
NAF also operates in Maryland and its practices affect many people in our state, though most are unaware of its existence.
Many credit card companies, retailers, banks, and communication companies insert into the fine print of their agreements Âmandatory pre-dispute arbitration clauses, whereby consumers waive their right to have their day in court if a dispute arises.
Instead, typically without knowing it, the consumer agrees that any dispute will be resolved by an arbitration forum selected by the credit card company or other creditor. Increasingly, credit card companies, banks and others require that consumers arbitrate disputes through the National Arbitration Forum, which allegedly stacks the deck against the consumer.
The letter to Attorney General Gansler states, in part, ÂMCRC asks that you use your good offices to protect Maryland consumers from unfair, deceptive and illegal arbitration practices. This is an issue that most Marylanders are not aware of, but which has a significant impact on nearly every resident of our state because it touches nearly everyone who uses a credit card, signs a cell phone contract or opens a bank account.Â
Download the letter here.
For additional information on mandatory arbitration, visit www.fairarbitrationnow.org.
To read the Minnesota AGÂs press release, click here.
To download the Minnesota complaint, click here.
Minnesota Attorney General Files Suit Against National Arbitration Forum
July 14, 2009
The following is excerpted from a NACA email alert. Visit NACA here.
Today the Minnesota Attorney General filed a lawsuit against the National Arbitration Forum alleging “consumer fraud, false advertising and deceptive trade practices by ‘misrepresenting its independence’ and hiding its ‘extensive ties’ to the collection industry.”
Below are two links to articles on the lawsuit.
NACA plans to use the Minnesota Attorney General’s complaint as well as the 2008 complaint filed by the City of San Francisco against NAF to help push the Arbitration Fairness Act through Congress.
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