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Senate advances bill allowing optional class-action waivers in some credit contracts
Summary
Senators amended and advanced SB252, which would permit creditors and debtors to contractually agree to waive class-action suits if the waiver is clear; supporters said it resolves circuit-court ambiguity, while critics warned consumers may unknowingly surrender rights.
The Utah Senate debated and amended Senate Bill 252 on Feb. 20, a measure that would permit creditors and debtors to agree contractually to waive the right to initiate or participate in a class-action lawsuit.
Sponsor Sen. Bramble moved Amendment 1 to change an "and" to an "or" in disclosure formatting language so financial institutions can use existing paper stock for bold or all-capital disclosures; the amendment was adopted. "What this bill does, it simply allows for a waiver by the debtor of the right to initiate or participate in a class action lawsuit," Bramble said on the floor, adding the waiver is optional and intended to remove ambiguity arising from differing federal circuit rulings.
Opponents questioned the consumer effects. Sen. Arendt asked, "Why would we want to have our consumers waive that right?" and expressed concern that waivers may be buried in contract terms. Bramble responded that the change does not require waivers and that the bill aims to clarify the law where the Tenth Circuit has not yet weighed in.
Following debate the Senate called the question on whether SB252 should be read for a third time. The clerk recorded 21 yes votes, 5 nay votes and 3 absent; the bill was placed on the third-reading calendar for further consideration.
