Illinois Attorney General Lisa Madigan and her counterparts from 17 other states support the Consumer Financial Protection Bureau's (CFPB) proposed rule to limit mandatory arbitration clauses in consumer contracts for financial products and services.
The state attorneys general announced their support for the proposed rule in a letter sent Thursday to the CFPB's director.
Mandatory arbitration clauses typically prevent consumers from pursuing group claims in court against financial institutions.
As described by the CFPB, its proposed rule "would ban companies from putting mandatory arbitration clauses in new contracts that block groups of their customers from suing them."
In addition to Illinois, state attorneys general from the District of Columbia as well as California, Delaware, Hawaii, Iowa, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington signed off on the letter.
"Reinstating the right of consumers to join together in court to litigate common grievances against financial institutions is important to consumers whose only current recourse for their claims is individual adjudication in an arbitral forum," their letter reads.
"[R]estoring the right of consumers with common claims to pursue redress through class actions will provide a valuable check against corporate misconduct," the signees also state in the note.