united-states contract-law terms-of-service banking arbitration
What are the limits of removing judicial recourse through arbitration clauses?
<p>Suppose a FINRA-regulated financial institution is notorious for littering its service agreement with purportedly binding arbitration clauses, but then exercises a policy that amounts to depriving a customer of their assets without any lawful basis.</p>
<p>As their line of business is heavily regulated by statutes and regulations, surely there are certain immutable parameters as to how they should operate that cannot simply be contracted away with provisions in their terms of service that one may be required to sign on the dotted line of in opening an account.</p>
<p><strong>If such a company oversteps one of these parameters for lawful operation, are arbitration clauses binding in respect of these breaches, in removing judicial recourse for the customer in court, rather than in arbitration venues?</strong></p>
<p><strong>And what other scenarios give rise to causes of action that can immutably transcend arbitration clauses?</strong></p>

<blockquote>
<p>If such a company oversteps one of these parameters for lawful
operation, are arbitration clauses binding in respect of these
breaches, in removing judicial recourse for the customer in court,
rather than in arbitration venues?</p>
</blockquote>
<p>In this situation, the arbitration clause (assuming it was actually entered into) is binding and there is no meaningful judicial recourse through a civil lawsuit. It does not bar criminal prosecutions or administrative agency action.</p>
<blockquote>
<p>And what . . . scenarios give rise to causes of action that can
immutably transcend arbitration clauses?</p>
</blockquote>
<p>Civil actions seeking redress from sexual assaults are exempt from arbitration in the U.S., pursuant to H.R. 4445, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which was signed into law on March 3, 2022.</p>
