Eldercare service providers would be well advised to watch proposed arbitration rules that have been aimed primarily at banks — for now.
The Consumer Financial Protection Bureau recently unveiled a measure that prohibits the use of arbitration agreements in consumer financial products.
This dramatic move by the nation’s consumer watchdog is basically a slam dunk, as it will not require approval from Congress. Specifically, it would apply to bank accounts, credit cards and other types of consumer loans. If you are a consumer who uses any of those things, that is probably good news. If you happen to run a long-term care facility, it’s anything but.
First, consider why it’s being done: to undo maneuvers by corporations to prevent customers from using the court system to challenge dubious practices. Hmmm.
Second, the new rules respond to mounting consumer anger against arbitration arrangements that are seen as hugely unfair. Double hmmm.
Moreover, when the Supreme Court voted 5-4 in 2011 to say that arbitration agreements can be enforced, the late Justice Antonin Scalia cast the deciding vote. The odds that a Democratic president would replace Scalia with another staunch conservative are basically zero. I’m not foolish enough to predict that a Democratic candidate will be our next president, but the current polling numbers are not exactly promising for the GOP.
Put another way, an arbitration deal very similar to the one skilled care facilities enjoy may soon get upended. Many of the gripes used against the arbitration benefits that banks enjoy could easily be used against operators in this field as well. And by the way, the narrow Supreme Court ruling that kept arbitration rules barely alive might be ripe for the picking.
In other words, you have nothing to worry about. That is, unless a deluge of frivolous lawsuits in your future is something to be concerned about.