Late last month, ACORN made a surprise announcement: the national community organizing group is teaming up with the financial giant Citigroup to promote mortgage loans and other financial services for immigrant borrowers.

ACORN also signed on to Citi’s newly expanded “best practices” guidelines to prevent predatory lending—mortgages that burden borrowers with excessively high interest rates, fees and penalties. Among other measures, Citi now vows to limit penalties for early payment of loans.

But Citigroup still maintains one practice that ACORN and other consumer advocacy groups loathe: Through its CitiFinancial division, it is one of the few financial institutions that still includes mandatory arbitration clauses in its high-rate, or “subprime,” loans. These clauses bar homeowners from taking their bank to court if they get a raw deal.

In conjunction with the announcement, eight national consumer organizations—including AARP, Consumers Union, Consumer Federation of America and the U.S. Public Interest Research Group—issued a statement condemning Citi’s use of the clauses. “If a lender prohibits borrowers from protecting their homes and family wealth in an open and accessible court of law, then the effect of any voluntary ‘best practices’ will be questionable,” said Wade Henderson of the Leadership Conference on Civil Rights. “Access to the courts has been essential to securing civil rights in this country and mortgage contracts that force homeowners into a second-class justice system are unacceptable.”

The groups were not quite so ready to condemn ACORN. They work closely with ACORN on advocacy against predatory lending, including legislation before Congress, and they couched their criticism carefully. Allen Fishbein, director of housing and credit policy at the Consumer Federation, told City Limits, “We thought the lack of a ban on mandatory arbitration was an obvious omission from the good things” ACORN and Citi had to announce.

ACORN has a history of successful opposition to mandatory arbitration in mortgage loans. In June, ruling in a class-action suit ACORN helped coordinate, a federal judge in California ruled that aggrieved borrowers did not have to to seek arbitration with Household International Inc., another subprime lender. At the time, ACORN President Maude Hurd said in a statement: “These mandatory arbitration clauses are meant to allow the company to escape the consequences of making illegal and abusive loans. When they break the law they need to be held accountable for the damage they are doing.”

A few days before the announcement of their partnership with Citi, ACORN organizers Steve Kest and Lisa Donner defended the deal in a listserv message to other anti- predatory lending activists: “Acorn cannot make [mandatory arbitration] the SINGLE most important issue, and the one on which everything else must stand or fall.”

Kest maintains that the Citi agreement is a big win for ACORN’s constitutents. “We have so many members who would otherwise get shut out of the mortgage market or would otherwise go to subprime loans,” he said. And while ACORN remains opposed to mandatory arbitration, as a practical matter, he says, most people who get socked with predatory loans don’t take their cases to court even when they’re free to. “Our members don’t have access to lawyers who are willing to take on their cases or have the expertise to do so,” said Kest. “As a practical matter the legal opportunity is pretty hollow.”