Should we allow class action waivers in arbitration agreements?
Bill Summary
This resolution aims to cancel the Consumer Financial Protection Bureau’s (CFPB) arbitration rule using the Congressional Review Act (CRA). The rule makes it easier for consumers to file or join a class action lawsuit related to consumer financial products. Rep. Rothfus, Keith J. [R-PA-12]
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Opponents say
· CFPB’s rule incentivizes companies to comply with the law to avoid group lawsuits. Arbitration clauses enable companies to avoid being held accountable for their conduct.
· In fact, the current rule under CFPB reaffirms the consumer’s right to file class action lawsuits by mandating that companies explicitly state that any arbitration clauses included in a contract cannot be used to stop consumers from being part of a class action in court.
· In fact, the current rule under CFPB reaffirms the consumer’s right to file class action lawsuits by mandating that companies explicitly state that any arbitration clauses included in a contract cannot be used to stop consumers from being part of a class action in court.
Proponents say
· The CFPB’s own studies show that consumers who use arbitration gain more favorable outcomes than those who hire trial lawyers for class action lawsuits - the average payout for a trial lawyer in a class action lawsuit is $1 million, compared to an average payout of $32 for a consumer.
· The anti-arbitration rule requires companies that choose arbitration to absorb the high litigation costs of class actions and the additional costs of arbitration, which discourages them from taking the optional cost of arbitration
· The anti-arbitration rule requires companies that choose arbitration to absorb the high litigation costs of class actions and the additional costs of arbitration, which discourages them from taking the optional cost of arbitration
- House Republicans Introduce Resolution to Stop CFPB’s Anti-Consumer Law
- CFPB Issues Final Rule on Arbitration
- CFPB Issues Final Rule Banning Class Action Waivers In Financial Services Contracts
- Chill Out: the CFPB can Bar Class Action Waivers if it Wants To
- CFPB Proposes Prohibiting Mandatory Arbitration Clauses that Deny Groups of Consumers their Day in Court
