The Union Veterans Council supported the Consumer Financial Protection Bureau’s ban of forced arbitration clauses in a letter to congress this week, claiming that the “rigged, secretive” practice kept the problem of illegal servicemember vehicle repossessions in the dark.
Specifically, the group cites how veterans were denied their day in court prior to the revelation that Santander Consumer USA and Wells Fargo Dealer Services had both illegally repossessed active-duty servicemembers’ vehicles.
Santander and Wells Fargo both faced fines for the practice to the tune of $9.35 million in 2015 and $24 million last year, respectively.
“To pull back these rights for consumers, it’s un-American,” Veterans Council Executive Director Will Attig told Auto Finance News. “The idea of not having your day in court because a line was buried deep inside a contract … goes against what a lot of servicemen and women go overseas to fight for.”
Although the CFPB’s ban on forced arbitration went into effect on Sept. 18, the industry is working hard to delay or overturn the rule through a lawsuit as well as through the Republican-led Congress, which currently doesn’t have the votes.
Wells Fargo & Co. Chief Executive Tim Sloan during a Congressional hearing this week defended his company’s improvements on SCRA compliance since the issue, but stuck by the company’s use of forced arbitration.
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