California Governor Signs Arbitration Bill into Law
California Governor Signs Arbitration Bill into Law

After Wells Fargo employees were caught for creating millions of fraudulent accounts without their customers’ knowledge, the company avoided lawsuits by citing the arbitration agreements signed by customers. These agreements, they claimed, shielded them from being taken to court over the fraudulent accounts. Customers would instead have to settle the dispute through arbitration.

SB 33 Allows Defrauded Customers to Sue Banks

California lawmakers took matters into their own hands last year when they introduced SB 33. The arbitration bill would prohibit banks from requiring disputes over fraudulent accounts to be settled via arbitration. Instead, defrauded customers would be able to take their complaints to court. In October, Governor Jerry Brown signed the arbitration bill. It took effect on Jan. 1. The new law affects both federally chartered and state-chartered banks.

Those in opposition to the bill from the California Chamber of Commerce and other business groups argued it would likely be invalidated by federal courts. The U.S. Supreme Court has generally ruled that states cannot make rules that disfavor arbitration. However, in light of the Wells Fargo controversy and outrage over forced arbitration, change could be imminent.

Similar bills have been introduced in the House and Senate. However, those bills have yet to move forward.

“Forced arbitration agreements are harmful to consumers. In the case of Wells Fargo, arbitration has allowed them to escape responsibility for serious offenses against customers,” said Attorney Walter Clark, founder of Walter Clark Legal Group.

Our firm has been handling personal injury cases throughout the California Low Desert and High Desert communities for over 30 years. With a 95% success rate, the California personal injury attorneys at Walter Clark Legal Group will fight to hold those responsible for your loss accountable and win compensation to cover medical bills, lost wages, and pain and suffering. If you have been injured and want to discuss your legal options, contact us today for a free consultation with an experienced personal injury lawyer. We have offices in Indio, Rancho Mirage, Victorville, and Yucca Valley and represent clients through the entire California Low Desert and High Desert communities.

DISCLAIMER: The Walter Clark Legal Group blog is intended for general information purposes only and is not intended as legal or medical advice. References to laws are based on general legal practices and vary by location. Information reported comes from secondary news sources. We do handle these types of cases, but whether or not the individuals and/or loved ones involved in these accidents choose to be represented by a law firm is a personal choice we respect. Should you find any of the information incorrect, we welcome you to contact us with corrections.

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