NMP - August 2017 - 83

advocacy groups are supporting
the Protection. For some reason,
they are not graciously willing to
accept the merchant's
magnanimity nor are they
particularly impressed with a
policy wonk's exasperated
indignation. In their view,
eliminating the Take-It-or-LeaveIt arbitration clause, which gives
consumers their day in court, is
precisely what they would like to
see implemented.
According to Rohit Chopra, a
senior fellow at the Consumer
Federation of America-an
umbrella group for dozens of
consumer advocacy
organizations-the Protection will
help to "combat the culture of
companies profiting from
charging illegal fees and
committing other crimes against
their customers. This is an
important step of restoring law
and order to the financial
marketplace."20 Representative
Maxine Waters (D-CA), the
Ranking Member of the Financial
Services Committee, declared
that "it is outrageous that
Republicans are trying to nullify
the rule to the detriment of
consumers. Republicans should
think twice before taking away
consumers' rights to be heard in
a court of law."21
So, the gloves are off! Why this
umbrage at denying consumers
access to the court?

realistic opportunities to negotiate
terms that would benefit their
interests, consumers cannot obtain
the desired product or service
unless they acquiesce to this
provision. There are arbitration
agreements that include due
process protections, but there are
others that shorten statutes of
limitations. Arbitration clauses may
alter the burdens of proof, limit the
amount of time a consumer has
available to present a case, or
otherwise impose constrictive
procedural rules. In fact, most of
the time it is the corporation, not
continued on page 84

83

n National Mortgage Professional Magazine n AUGUST 2017

"A second factor is the increased
expense, apart from legal fees,
that a litigant must pay to pursue
a lawsuit to conclusion. A third
factor is increased unwillingness
of lawyers to take a case on a
contingent-fee basis when the
anticipated monetary award is
modest. A fourth factor is the
decline of unions and other
institutions that provide their
members with free legal
representation. A fifth factor is
the imposition of mandatory
arbitration. A sixth factor is
judicial hostility to class action
suits. A seventh factor is the
increasing diversion of legal
disputes to regulatory agencies.
An eighth factor, in criminal

Mandatory arbitration obviously
restricts a consumer from having a
judicial hearing. This provision is
called a "contract of adhesion,"
which is a contract between two
parties, where the terms and
conditions of the contract are set
by one of the parties, and "the
other party has little or no ability to
negotiate more favorable terms
and is thus placed in a 'take it or
leave it' position."23 It is a contract
between a party with stronger
bargaining power and signed by

another party with weaker
bargaining power.24 Indeed, a few
centuries ago, this type of
provision was considered
"unconscionable" because it was
thought that these contracts were
such "as no man in his senses and
not under delusion would make on
the one hand and as no honest
and fair man would accept on the
other."25
Importantly, the second party
typically does not have the power
to negotiate or modify the terms of
the contract. To put it clearly, this
type of contract is fraught with
peril for consumers, because
without giving the consumers

NationalMortgageProfessional.com

Constitutional right to a jury
The esteemed jurist, Jed S.
Rakoff, who is the Senior U.S.
District Judge of the United
States District Court for the
Southern District of New York,
wrote there are many reasons
why access to the court has been
increasingly denied. According to
Judge Rakoff, "one is the ever
greater cost of hiring a lawyer."
He then enumerates up to eight
other reasons:

cases, is the vastly increased risk
of a heavy penalty in going to
trial."22


http://www.NationalMortgageProfessional.com http://nmpmag.wufoo.com/forms/whos-who-in-wholesale-2017/

Table of Contents for the Digital Edition of NMP - August 2017

Contents
NMP - August 2017 - Cover1
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NMP - August 2017 - 1
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