Lawmaker Challenges Dimon Over JPMorgan Arbitration Plan
Lawmaker Challenges Dimon Over JPMorgan Arbitration Plan
(Bloomberg) -- U.S. Representative Katie Porter is butting heads with Jamie Dimon again.
The Democrat from California claims the bank’s new policy of making credit-card customers use arbitration instead of the courts to resolve payment disputes violates her state’s laws.
“Consumers and your bank should be able to choose arbitration to resolve a dispute but not be forced into such an arrangement merely by failing to wade through pages of disclosure,” according to a copy of the letter sent Thursday to Dimon, JPMorgan’s chief executive officer.
JPMorgan spokesman Andrew Gray declined to comment on the letter, but pointed to a 2015 Consumer Financial Protection Bureau study showing that when consumers win in arbitration, they receive higher awards than the typical plaintiff in a class-action suit. The CFPB said the study showed that class actions are still a more effective means for consumers to challenge companies.
Porter, a former consumer-protection lawyer, also sent a letter to California Attorney General Xavier Becerra, asking him to review the bank’s policy. State law prohibits “adhesion contracts,” those drafted by one party and in which the other has little to no ability to negotiate, she wrote in the letter.
At a congressional hearing in April, Porter asked Dimon about the bank’s minimum wage, which she said wouldn’t be enough to cover living expenses for a single mother working as a full-time bank teller in Irvine, a city in her district. The CEO said he was sympathetic, and pointed out that she was referring to an entry-level job that often goes to high-school graduates, and that JPMorgan offers promotion opportunities. Porter later clarified that the situation she’d described was hypothetical.
To contact the reporter on this story: Michelle F. Davis in New York at mdavis194@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Christine Maurus
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