Mandatory Arbitration Denies Access to Justice


Center for Responsible Lending
June 28, 2006

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.

Mandatory Arbitration Harms Homeowners

CRL critiques a report by Ernst & Young that claims borrowers are not disadvantaged by binding mandatory arbitration.
Comments on Ernst & Young Arbitration Outcomes Report

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 >

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) >

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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.