Credit card terms may let shoppers avoid mandatory arbitration

Personal Finance

This summer, the Consumer Financial Protection Bureau issued a rule that would have banned banks, credit card issuers and other financial firms from including arbitration clauses in their customer agreements. But in late October, Senate Republicans voted to kill that rule before it took effect.

Mandatory arbitration clauses are already prohibited in mortgage contracts, under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Active military servicemembers and their dependents are also exempt from mandatory arbitration clauses in many financial products, under the Military Lending Act.

“Nobody goes shopping for a card with arbitration clauses as the primary thing on their mind, but it’s another thing that’s certainly worth considering,” said Matt Schulz, senior industry analyst for “The last thing you want to have happen if something goes wrong between you and a credit card issuer is to have your options limited.”

Only nine of 30 credit card issuers have an arbitration clause in the cardholder agreement that cannot be avoided, the site found. The rest either don’t have an arbitration clause or have policies that allow new cardholders to opt out. (See chart below.)

Source link

Products You May Like

Articles You May Like

How to avoid extra costs that can come with an auto lease
Facebook’s slide cost Mark Zuckerberg $6.06 billion in one day
US farmers worried agriculture could be slammed by China trade war
the medical expense deduction is lower for 2017 and 2018

Leave a Reply

Your email address will not be published. Required fields are marked *