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Speaker 1: Well, I was time for our daily Bloomberg Law Brief,

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Speaker 1: exploring legal issues in the news, and today Bloomberg La

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Speaker 1: host Jun Grosso discusses a new rule by the Consumer

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Speaker 1: Financial Protection Bureau which makes it easier for consumers to

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Speaker 1: sue their banks. She speaks with Mike Gonzal, fellow at

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Speaker 1: the Roosevelt Institute and Raphael Mangoual, legal policy project manager

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Speaker 1: at the Manhattan Institute. Mike tell us about these mandatory

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Speaker 1: arbitration clauses that are found often in the fine print

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Speaker 1: of everything from credit cards to checking accounts. Yes, and

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Speaker 1: they go far beyond that too, too elderly care homes,

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Speaker 1: to students and a for profit schools. But in the

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Speaker 1: financial world where the CFPB has jurisdiction, there are two

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Speaker 1: big developments I think that happened the last two years

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Speaker 1: that really pushed this into the public consciousness. Once one

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Speaker 1: was a series of reporting by the New York Times

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Speaker 1: really just saying how broad and widespread this is on

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Speaker 1: that virtually every type as you just mentioned, but virtually

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Speaker 1: every type of financial product, be it your credit card,

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Speaker 1: be you're checking account, basically anything that is not a mortgage,

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Speaker 1: which is banned by law. From having these kinds of arbitration,

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Speaker 1: of being forced has these kinds of contracts, and it

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Speaker 1: really is a transfer of power from people's ability to

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Speaker 1: go to court, people's ability to be seen with public

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Speaker 1: power into private power, into setting set by the banks themselves.

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Speaker 1: And the second was the Wells Fargo scandal. Um. What

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Speaker 1: people found, weirdly enough, was that the fake accounts that

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Speaker 1: people were signed up for having these arbitration accounts, so

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Speaker 1: people could not actually sue in the way that they

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Speaker 1: normally thought they would, So the potential for abuse became

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Speaker 1: very apparent, even though it was always there. Raphael, what

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Speaker 1: does this new rule by the Consumer Financial Protection Bureau

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Speaker 1: do well? It was essentially banned banks from blocking consumers

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Speaker 1: from joining class action lawsuits to resolve that there's their

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Speaker 1: disputes with those banks. And the way that banks and

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Speaker 1: other financial institutions normally do that is through the inclusion

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Speaker 1: of an arbitration clause. But the problem is that the

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Speaker 1: opposition to these sorts of clauses actually, I think um

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Speaker 1: reflects a fundamental misunderstanding of how effective class actions actually

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Speaker 1: are as a way to resolve these disputes. Remember, most

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Speaker 1: of these disputes are for small dollar amounts, and so

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Speaker 1: individual litigation is not going to be the most efficient

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Speaker 1: way to handle that UM, which is the benefit of

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Speaker 1: an arbitration because it's a lot cheaper, a lot quicker,

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Speaker 1: a lot more efficient, and although most people don't know this,

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Speaker 1: more often results in a favorable UM ruling for a plaintiff.

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Speaker 1: As Raphael Magual, legal policy project manager at the Manhattan

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Speaker 1: Institute and my Gonzal, a fellow at the Roosevelt Institute,

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Speaker 1: speaking with Bloomberg Laho student grass So, you can listen

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Speaker 1: to Bloomberg Law Wait days at one pm Wall Street

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Speaker 1: Time here on Bloomberg Radio and among the top legal

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Speaker 1: stories from Bloomberg Law. Donald Trump and high ranking members

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Speaker 1: of the White House staff are being sued for blocking

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Speaker 1: users on the president's Twitter account. The night First Amendment

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Speaker 1: Institute ALLEDGI the President's blocking of dissending Twitter users violates

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Speaker 1: the Constitution. In the complaint, the Foundation argues the President's

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Speaker 1: Twitter account is a public forum under the First Amendment

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Speaker 1: because of how both Trump and his staff use the

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Speaker 1: account to communicate to official matters. In the UK, Tesco

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Speaker 1: is facing an in depth probe into its four point

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Speaker 1: seven billion dollar bid for food wholesale or Booker Group.

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Speaker 1: Regulators are expressing concerns that the deal could leave shoppers

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Speaker 1: and more than three fifty areas worse off. The Competition

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Speaker 1: of Markets Authority says the deal could enable Booker to

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Speaker 1: reduce the services or terms it offers stores that currently supplies.

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Speaker 1: And that's this morning's Bloomberg Law Brief. You can find

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Speaker 1: more legal news at Bloomberg Law dot com and Bloomberg

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Speaker 1: BNA dot com. Attorneys will find exceptional legal research and

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Speaker 1: business development tools there as well. Visit Bloomberg Law dot

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Speaker 1: com and Bloomberg BNA dot com for more information