Opt Out of My Legal Rights?

Shepherd

Shepherd

Final Approach
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Shepherd
So my layer is gone for the month and I get a letter from the Credit Union.
They want all members to give up the right to sue the Credit Union, instead we will be required to use "binding arbitration".
They will, of course, be choosing who does the arbitration.
In the history of "binding arbitration" has the little guy ever come out on top?
We have the option to opt out, by writing a letter stating we will opt out.
My knee jerk reaction is to "opt out" and retain my rights to sue the crap out of them should I be so inspired.

Anyone have any advice or info to share?

Thanks,
 
I'd decline to sign it, but be aware they may "fire" you as a customer if you don't. I'm not well-versed in banking or consumer protection laws, so it's possible they're not allowed to do that, but I think arbitration is generally a kangaroo court that I don't want to participate in (and I'm a litigator by day). A lot of companies "think" it's better because there's no jury, but there's also a LOT fewer checks and balances in arbitration that can cut both ways.
 
EdFred said:
I haven't and wouldn't sign that.
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I don't think you need to sign anything to enter into a mandatory arbitration clause, though this likely varies state-by-state. The OP is stating that he has to actively opt out. If he doesn't do so, continued use of the Credit Union's services likely mandates arbitration and implies acceptance of the terms of the letter he received, assuming my understanding of his post is correct.
 
Interestingly, in the letter from the Credit Union, there is nothing that indicates there is any punishment or change in status for opting out.
I'll find out this afternoon when I drop by to have a chat.
 
Don’t think I’d be signing away my rights.something doesn’t sound right if the credit union is worried about being sued.
 
bradg33 said:
I'm not well-versed in banking or consumer protection laws, so it's possible they're not allowed to do that
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Check Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201, 1204, (2012) regarding the enforceability of arbitration clauses despite states not liking them.
 
midlifeflyer said:
Check Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201, 1204, (2012) regarding the enforceability of arbitration clauses despite states not liking them.
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Interesting. I've actively avoided arbitration my entire career, so while I knew the Federal Arbitration Act was very strong, I wasn't aware that SCOTUS had viewed it quite that strongly. Thanks for the info!
 
Is there any company that a typical person deals with that hasn't required arbitration in their most recent term and conditions?
 
bradg33 said:
Interesting. I've actively avoided arbitration my entire career, so while I knew the Federal Arbitration Act was very strong, I wasn't aware that SCOTUS had viewed it quite that strongly. Thanks for the info!
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I've been in the arbitration world, but mostly B2B. There are a lot of advantages to arbitration, even for the little guy. But there are enough downsides, especially a potential for industry bias in the tort and quasi-tort areas that I was a little surprised to see it when it came down.
 
Shepherd said:
I'll find out this afternoon when I drop by to have a chat.
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I agree that dropping by for a chat would and could be a reasonable and possibly preferable way to resolve any questions you may have. Just be wary that anything you are told won't amount to anything enforceable against the credit union. When push comes to shove, anything put in writing will triumph over anything said to the contrary; and upper management will surely claim (through their lawyers, nach) that if anything was said to the contrary by an employee, they were unauthorized to change policy or represent the company.
 
midlifeflyer said:
Check Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201, 1204, (2012) regarding the enforceability of arbitration clauses despite states not liking them.
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What is it about the acronym "FAA" that compels the subject it describes to be so disagreeable? :rofl:
 
DJTorrente said:
I agree that dropping by for a chat would and could be a reasonable and possibly preferable way to resolve any questions you may have. Just be wary that anything you are told won't amount to anything enforceable against the credit union. When push comes to shove, anything put in writing will triumph over anything said to the contrary; and upper management will surely claim (through their lawyers, nach) that if anything was said to the contrary by an employee, they were unauthorized to change policy or represent the company.
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Exactly. There is about a zero percent chance that he'll be able to speak to anyone who actually (a) knows anything about it on a substantive level, or (b) has any power to change anything.
 
This might or might not be something that I deal with literally everyday. That said, I can't tell you what you should do, but if it were me and I cared enough, I would opt out. The fact of the matter is that as someone else pointed out, almost every consumer agreement you enter into today requires arbitration. And most people just don't care enough to opt out.

It's not true to say that arbitration always screws the consumer, although arbitration provisions can be written to be consumer unfriendly. But arbitration is generally less expensive for both the consumer and the business, and generally no less effective if you have meritorious claims.
 
If it's a credit union, those are typically organized as co-ops, are they not? As in the board members are elected by the membership, i.e. they "work for you". I'd request a meeting with the vice president or some such and talk about it. Or run for the board.
 
RussR said:
If it's a credit union, those are typically organized as co-ops, are they not? As in the board members are elected by the membership, i.e. they "work for you". I'd request a meeting with the vice president or some such and talk about it. Or run for the board.
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Why bother with all that rather than just opting out?
 
Lindberg said:
Why bother with all that rather than just opting out?
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They might not be intimately aware of the push for mass arbitration, so it could just be a meeting to see why it was being pursued at all. Might just be a cost-savings measure for some legal retainer or similar.
 
RussR said:
If it's a credit union, those are typically organized as co-ops, are they not? As in the board members are elected by the membership, i.e. they "work for you". I'd request a meeting with the vice president or some such and talk about it. Or run for the board.
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I've never worked for a credit union, which makes me a rarity in my family. My Dad, two brothers, three step brothers and step sister all worked at one. I grew up steeped in the system, if you will. Being a board member is a serious commitment. You have to have financial training, be bondable, be willing to spend serious time reading and understanding financial statements and maintain a current knowledge of the banking industry. Your typical reward for this effort is a few nice dinners and maybe a trip to a conference to stay current.
 
Other than your right to file suit, what's at stake here? A car loan, a home loan, maybe a heloc? Is it really worth the right to file suit which may well cost you more than the stakes on the table?

Dunno, just asking.
 
bradg33 said:
Exactly. There is about a zero percent chance that he'll be able to speak to anyone who actually (a) knows anything about it on a substantive level, or (b) has any power to change anything.
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True. There's also an extremely slim chance that when he returns the form it will be reviewed at all, much less by anyone with any legal knowledge or power.

When I find something objectionable in a standard form, I'll often simply line out the offending phrase, initial the change, sign the form and send it in. I've never had anyone push back. I'm sure some clerk or secretary just drops it into a file, but if it ever becomes an issue and they have to produce the signed form they'll find I never agreed to the condition.
 
What’s an example of a lawsuit vs a credit union, and one that was unsuccessful? I’m interested to see how realistic one is; obviously someone thinks it’s enough of a risk to stick an arbitration clause in.
 
Can anyone who's opposed this arbitration agreement (that none of us have read) explain what's so objectionable about it? Or even what's objectionable about consumer arbitration in general?
 
Lindberg said:
Can anyone who's opposed this arbitration agreement (that none of us have read) explain what's so objectionable about it? Or even what's objectionable about consumer arbitration in general?
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I may have read it. Not this one in particular, but a similar one. Awhile back, I’ll say ‘bout 10 years ago they started appearing. Peel the layers away and it’s about Class Action Lawsuits. Banks were getting tired of them. Enough Legislators agreed and the Law was passed.
 
One of the funny things about the pro/con arguments about arbitration is that many times, the same people who complain about how bad the court system is with its expense, delays, and lack of subject-matter expertise also dislike arbitration’s lower costs, shorter time span, and subject-matter expertise.
 
midlifeflyer said:
One of the funny things about the pro/con arguments about arbitration is that many times, the same people who complain about how bad the court system is with its expense, delays, and lack of subject-matter expertise also dislike arbitration’s lower costs, shorter time span, and subject-matter expertise.
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Not exactly. I dislike giving up my options before the event.
 
I'd have to see the document, but usually, you don't "give up" things by having an arbitration clause. Just about every investment account has a similar clause in it that requires you to submit to FINRA arbitration and if you don't like what happens there, then you can go to court. In fact, it's rare that things go to court after arbitration but it can happen. In fact, usually things are settled before the formal arbitration decision anyhow. This I know. I am one of those arbitrators.
 
Two basic reasons:

The person or people deciding your fate may be less than impartial because his/her/they may need the fees they get from providing arbitration services, ie: follow the money, and

The selection of the arbitrator/arbitrators is controlled by someone named “not you”.

-Skip
 
flyingron said:
I'd have to see the document, but usually, you don't "give up" things by having an arbitration clause. Just about every investment account has a similar clause in it that requires you to submit to FINRA arbitration and if you don't like what happens there, then you can go to court. In fact, it's rare that things go to court after arbitration but it can happen. In fact, usually things are settled before the formal arbitration decision anyhow. This I know. I am one of those arbitrators.
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The "usually" I've seen is about going to court to enforce the arbitration decision, not an alternative of mulligan. And that review is even more limited than the court review of an administrative agency decision. I have seen non-binding arbitration clauses, but only rarely.

Investment accounts subject to FINRA is an exception. The ability to go to court despite an arbitration clause is protected by FINRA Rule 2268 which is probably based on 17 C.F.R. §165.19
 
Binding is the key word. Limits legal expenses, no appeals. Layperson understanding (and I’m not an A&P).
 
Watching recent legal system behavior, it seems to me arbitration is preferrable.
 
Skip Miller said:
Two basic reasons:

The person or people deciding your fate may be less than impartial because his/her/they may need the fees they get from providing arbitration services, ie: follow the money, and
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This often has the consequence of arbitrators being seen as less likely to grant early relief, such as dismissals or summary judgment, which actually tips to the plaintiff's favor.
Skip Miller said:
The selection of the arbitrator/arbitrators is controlled by someone named “not you”.
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I've never seen an arbitration agreement where both sides didn't participate in choosing the arbitrator(s). It's not impossible that someone's agreed to that, but it would likely be tossed in a consumer case.
 
Lindberg said:
Arbitration requires an agreement to arbitrate. Almost always entered into before "the event."
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Yes, and that’s my objection. I may or may not be willing to agree to arbitration depending upon the circumstances.
 
I don't have any first hand experience, but consumer advocate Clark Howard often states that over 99% of cases arbitrated are found in favor of the bank/company, not the individual. Because it's a stacked deck and the arbitrator is not impartial.
 
RussR said:
I don't have any first hand experience, but consumer advocate Clark Howard often states that over 99% of cases arbitrated are found in favor of the bank/company, not the individual. Because it's a stacked deck and the arbitrator is not impartial.
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Not to stump in favor of compelled arbitration, but the most frequent filers of arbitrations are credit card companies seeking enforceable judgements against default debtors. Lenders have an institutional capability to prosecute their claims; defaulting debtors don't. Defaulting debtors also -- for the vast majority of cases -- have no defense.

So while the deck may be stacked against the debtor -- because of the institutional capacity; because the venue of the arbitration will be far more convenient to the lender (Wilmington, DE or Sioux Falls, SD) than to the debtor (literally almost anywhere else); because the arbitrator may be seen to have an bias towards the lenders because the lenders initiate the vast majority of cases and therefore pay more fees...

The bottom line is that even if a defaulting debtor was afforded a hearing in a court located in their state in front of an article III judge -- they still owe money they haven't paid. All the bank wants in that case is a judgement that they can enforce to attach liquid assets or garnish wages to try and recover some portion of their loss.

The alternative is they sell the debt for cents on the dollar to collectors who harass the debtor.
 
RussR said:
I don't have any first hand experience, but consumer advocate Clark Howard often states that over 99% of cases arbitrated are found in favor of the bank/company, not the individual. Because it's a stacked deck and the arbitrator is not impartial.
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Maybe. Or maybe because the bank/company is right far more than the individual and would lose regardless of forum.
 
I'm not a big fan of arbitration in the business context, other than for some limited scope issues. My biggest objection is that, in the arena I play in (construction), most arbitration agreements include substantial restrictions on the right of the subcontractor (typically who my clients are) to conduct discovery - and the GC (who's usually the opposing party) has all the facts and documents that, if revealed as they would be in litigation, could well yield a better result for my subcontractor client. In a commercial dispute context, arbitration is not generally less costly than litigation and, in fact, can often cost a great deal more (because you pay the arbitrator by the hour, while the judge is paid by your taxes).

But the biggest objection I have is that arbitration leaves no public record of the dispute, hence protecting serial bad actors from exposure. No bueno.

All that said, a good arbitrator and legitimately impartial can and usually will reach a just result.
 
SCCutler said:
I'm not a big fan of arbitration in the business context, other than for some limited scope issues. My biggest objection is that, in the arena I play in (construction), most arbitration agreements include substantial restrictions on the right of the subcontractor (typically who my clients are) to conduct discovery - and the GC (who's usually the opposing party) has all the facts and documents that, if revealed as they would be in litigation, could well yield a better result for my subcontractor client. In a commercial dispute context, arbitration is not generally less costly than litigation and, in fact, can often cost a great deal more (because you pay the arbitrator by the hour, while the judge is paid by your taxes).

But the biggest objection I have is that arbitration leaves no public record of the dispute, hence protecting serial bad actors from exposure. No bueno.

All that said, a good arbitrator and legitimately impartial can and usually will reach a just result.
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Well said . I don't play in the consumer world at all, all commercial (and mostly real estate disputes among sophisticated parties). The restrictions on discovery and the occasionally insane deadlines that some people plug in are usually unworkable in my world. Plus, neither JAMS nor AAA are what I'd call "inexpensive."
 
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