Mandatory Arbitration Overview

Print this

Center for Responsible Lending
June 28, 2006

Denying access to justice

Most people assume they can take their grievances to court if a lender violates the law. Unfortunately, many borrowers are denied that option through "binding mandatory arbitration" (BMA), a common clause in loan contracts. Barred from bringing claims to court, victims of abusive lending practices frequently find that their loan contracts require them to go through arbitration: proceedings conducted in secrecy, with limited evidence and documentation. All too often, borrowers pay excessive costs and receive unfair results.

CRL has joined a coalition of leading consumer groups in a campaign to educate Americans about this serious breach of rights and outline ways to correct the problem. For more information, visit the Give Me Back My Rights Coalition.

Briefs & Factsheets

Mandatory Arbitration Harms Homeowners
Many homeowners have unknowingly signed mortgages that waive their legal rights to present any dispute before a jury. More >

Reports & Papers

Separate and Unequal Justice
Through binding mandatory arbitration, borrowers are forced to use a private legal system that is not equivalent to court adjudication. More >

In the Courts

Buckeye Check Cashing, Inc. v. Cardegna
CRL and other consumer groups filed a brief amici curiae in a Supreme Court case about mandatory arbitration. 
Read the brief (PDF) >

More Featured Content

Comments on Ernst & Young Arbitration Outcomes Report
Ernst & Young's report did not successfully demonstrate its claims that borrowers are not disadvantaged by binding mandatory arbitration.

NCLC Arbitration Update: Signs of Progress, but No Time to Celebrate
Mortgage agencies, courts and consumers so "no" to abusive mandatory arbitration clauses.

-

###

About the Center for Responsible Lending

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.