11.17.21
Bill to End Mandatory Arbitration Faces Steep Climb in Senate
by: Mark Schoeff Jr.
A bill that would ban brokers and investment advisors from including mandatory arbitration agreements in customer contracts is headed to the House floor, but gaining Senate approval will be a hard challenge. Sponsor Rep. Bill Foster (D-Ill.) said investors should not be forced into arbitration through FINRA and cited concerns about bias toward financial firms, a poor appeals process and problems with firms paying arbitration awards when they lose. The House Financial Services Committee on November 16 passed the Investor Choice Act, which would permit investors to take their claims against brokerages and investment advisory firms to court, and it will likely be approved by the Democratically-controlled House. However, the 50-50 party split in the Senate means the Republicans can filibuster the bill and require 60 votes for passage.
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