Financial Goliaths and Consumer Davids

https://www.nytimes.com/2017/07/13/opinion/letters/financial-goliaths-and-consumer-davids.html

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To the Editor:

Re “Rule Could Let Consumers Sue Financial Firms” (front page, July 11):

The Consumer Financial Protection Bureau’s adoption of a new rule prohibiting mandatory arbitration in consumers’ disputes with banks and other financial institutions adds to the growing recognition that regulation is needed to ensure that contracts enhance, rather than restrict, individual liberty.

Since Emancipation in the 19th century, American courts have viewed the act of entering into a contract as synonymous with liberty. Yet, by the mid-20th century, the Supreme Court in West Coast Hotel Co. v. Parrish accepted that society needs safeguards around contracts because liberty “requires the protection of law against the evils which menace the health, safety, morals and welfare of the people.”

Absent the assurance of legal rights, contracts can be used to abuse one party’s dominance over another.

By mandating arbitration of claims brought by individual consumers, corporations have used contracts to sidestep the rule of law. The new rule is an important first step in reclaiming the potential of contracts to expand opportunity and freedom.

TAL KASTNER, NEW YORK

The writer is acting assistant professor at New York University School of Law.

To the Editor:

Your article about a new rule by the nation’s consumer finance watchdog quotes Representative Jeb Hensarling, a Texas Republican, as saying, “In the last election, the American people voted to drain the D.C. swamp of capricious, unaccountable bureaucrats who wish to control their lives” — a stunning example of Orwellian Newspeak.

In other words, although we thought that the Trump “drain the swamp” mantra referred to getting rid of the special interests that rule Washington, according to Mr. Hensarling it means getting rid of the regulators who keep them in check.

EDWARD CORREIA, WASHINGTON

The writer is a lawyer whose practice includes regulatory matters.