Sens. Murkowski, Sullivan can still get it right on forced arbitration

Goriune Dudukgian (contributed photo)

Last month, U.S. Sen. Lisa Murkowski, R-Alaska, cast the final vote on a resolution to kill a Consumer Financial Protection Bureau (CFPB) rule backed by a wide-ranging coalition of military, consumer, progressive and conservative groups. Sens. Murkowski and Dan Sullivan declined to join two independent-minded Republican colleagues who rejected efforts to repeal a rule that restored our right to choose whether to arbitrate a dispute or to have our day in court when wronged by predatory payday lenders and Wall Street financial giants.

 

Service members and veterans were among the most prominent voices urging the senators to support the CFPB rule. The American Legion, The Military Coalition, representing 5.5 million servicemembers, 29 military groups, and leading veterans in Alaska saw the rule as necessary to protect active duty military and veterans from forced arbitration and to bolster the more narrow set of forced arbitration protections provided under the Military Lending Act.

Native Americans and other Alaskans who are impacted by widespread problems like the Equifax data breach or the Wells Fargo fake account scandal have now lost the choice of banding together to confront wealthy corporations. The rule protected individual Native Americans and also respected the sovereignty of Alaska’s tribes by exempting tribes from the rule’s requirements. Indeed, tribes have a lot in common with ordinary Alaskans, as tribes have been victims of forced arbitration and have seen their sovereign immunity breached by clauses imposed on them by outside corporations.

Sadly, the voices of ordinary Alaskans were silenced by powerful special interests and lobbyists, who falsely claimed that the rule would harm credit unions.

Murkowski and Sullivan should take a closer look at the impact of forced arbitration.

In one recent case, Shane Mathis, a member of the Navy, was kicked out of court when he tried to sue Green Cap Financial, which violated the Servicemembers Civil Relief Act and refused to reduce the interest rate on his auto loan after he entered the service.

Sergeant Charles Beard came home from a tour of duty in Iraq to find his car was illegally repossessed, but his case was thrown out of court due to a forced arbitration clause.

These cases, and countless others like them, made supporting the CFPB’s rule an obvious conclusion for servicemember and veteran organizations. Our Republican senators’ objections to the rule aren’t so cut and dry.

And Wall Street banks and lenders aren’t the only wrongdoers hiding behind fine-print “ripoff” clauses. Students stuck with debt from fraudulent for-profit colleges, seniors mistreated in nursing homes, Native Americans subject to employment discrimination, and people hit with unexpected fees for satellite TV charges all confront forced arbitration clauses designed to block people from the option of using the courts and from banding together.

The closed-door arbitration process is especially problematic, as shown by the cases of women seeking justice for sexual assault and harassment. While an open hearing could show victims they are not alone, corporations often turn to a secretive arbitration process. The highly publicized cases of Roger Ailes, Uber, and Kay Jewelers only begin to reveal how arbitration hides the prevalence of sexual harassment and assault in the workplace.

More than 66 percent of Alaskans voiced their support for the CFPB’s arbitration rule and are surely disappointed that Alaska’s senators didn’t side with them against forced arbitration.

But the senators have another chance to do right by Alaskans. They can support the Arbitration Fairness Act, which would bar the use of forced arbitration against consumers, employees and small businesses. Alaska’s senators should also push back against the Administration’s efforts to repeal protections for seniors in nursing homes and students defrauded by for-profit schools.

I hope that Murkowski and Sullivan will ignore lobbyist claims and listen to the concerns of Alaska’s veterans, elders, women, consumers, families and small businesses who are, once again, counting on them to protect our right to choose to handle disputes in court or in arbitration.


• Goriune Dudukgian lives in Anchorage and is a founding partner of the Northern Justice Project, where he represents low-income Alaskans and Alaska’s tribes. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.


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