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Consumers’ Research Commends Repeal of CFPB Arbitration Rule
Last night, the U.S. Senate voted to rescind the Consumer Financial Protection Bureau’s (CFPB’s) Arbitration Rule under the Congressional Review Act. Passed by the House in July, the Joint Resolution now heads to the White House. Consumers’ Research commends the Senate on its action, and we encourage President Donald Trump to sign the Joint Resolution of Disapproval as soon as possible.
The CFPB sought to push consumers towards class-action litigation by banning the use of mandatory arbitration clauses in financial services contracts. The Bureau’s own research shows that in arbitration, consumer complaints are resolved in months with an average compensation of just under $5,400 from arbitration. That same research found that class actions lawsuits take years to conclude and only return an average of $32 to consumers, often in the form of free credit monitoring and other non-monetary rewards.
Kyle Burgess, Consumers’ Research’s Executive Director, made the following statement on the repeal:
In striking down the CFPB’s Arbitration Rule, the U.S. Senate has made it clear that it supports the best interests of everyday consumers over that of trial lawyers. Had the Arbitration Rule gone into effect, it would have increased the cost of credit and led to consumers receiving worse outcomes when they resolve disputes with financial services companies.”
For more information on why this rule harms consumers, see here: http://consumersresearch.org/how-the-cfpbs-arbitration-rule-hurts-consumers-and-helps-lawyers/
Washington, D.C., October 5 – Founded in 1929, Consumers’ Research is the nation’s oldest consumer organization that seeks to increase the knowledge and understanding of issues, policies, products, and services of concern to consumers. For more information, visit: http://consumersresearch.org/ and follow Consumers’ Research on Twitter at @ConsumersFirst.