The Consumer Financial Protection Bureau is reviewing new regulations which will put the brakes on a contentious practice called mandatory arbitration. Under mandatory arbitration rules, consumers must take disputes they have with financial institutions to third party mediators. This prevents them from going into courts and presenting their issues to judges. Consumer advocates feel this practice benefits large financial institutions, credit card issuers and financial service providers to the detriment of consumers.
Fine Print in Consumer Contracts
Most Americans are unaware that there is fine print in many consumer contracts which requires they submit complaints concerning issues, such as disputed charges on financial accounts, to arbitration. Consumer advocates claim arbitrators are often biased and rule against consumers. It should be noted, in many situations, rulings by arbitrators are not appealable.
Arbitration Process
The arbitration process started out as a good idea. Its intent was to give consumers an inexpensive way to challenge bank practices. However, financial institutions have manipulated the arbitration process. When they feel an arbitration firm does not rule in their favor on a regular basis, they shop around for other arbitration companies. This gives arbitration companies a reason to rule in favor of banks so they will hire them again and again.
George Slover with the Consumer’s Union, the public policy and advocacy arm of Consumer Reports Magazine, stated “this proposal is a tremendous step towards cleaning up a system that has heavily favored companies over consumers who were wronged.”
The new proposal before the Consumer Financial Protection Bureau does not create a complete ban on arbitration. It proposes new rules which would allow unhappy consumers to start lawsuits against banks or other financial institutions as a group, through class actions, if they feel it is appropriate instead of submitting to arbitration.
Elliot S. Schlissel is a foreclosure lawyer representing consumers throughout the Metropolitan New York area. He litigates foreclosure cases against financial institutions. His goal is to keep his clients in their homes.
New York Real Property Actions and Proceedings Law (RPAPL) Section 1304 requires financial institutions and loan servicing companies to provide homeowners, on residential property, at least 90 days notice before initiating a 
Has the bank initiated a foreclosure action against you? How do you know the bank has acted appropriately with regard to fulfilling their obligations as a financial institution? The question then becomes, is the 
If you are behind on your mortgage payments, do not despair. Foreclosure lawsuits can be fought in the courts in New York. If you receive a letter from your financial institution indicating your home is going into foreclosure or you are served with a Summons and Complaint, your best defense is to go on the offense.
A foreclosure action was brought by JP Morgan Chase in the Supreme Court of New York County. Justice Francois Rivera was the judge assigned to the case. Chase claimed in their pleadings that Charles had executed a mortgage and note on real property in favor of Fleet Real Estate Funding. They claimed Fleet Real Estate Funding had assigned the mortgage to JP Morgan Chase. They claimed Charles defaulted on making his payments on the note and mortgage, they had accelerated the note and mortgage and served the acceleration notice on Charles.
