Oct 25, 2017
CFPB’s Arbitration Rule Was Never About Helping Consumers
Post by Freedom Partners
Arlington, VA — The U.S. Senate today voted under the Congressional Review Act (CRA) to repeal the Consumer Federal Protection Bureau (CFPB) “arbitration rule,” sending the resolution to the President’s desk. The CRA grants congress the authority to overturn federal regulations within 60 legislative days after being finalized.
The rule, previously repealed by the House, would prevent banks from including clauses in contracts that stipulate private arbitration in lieu of class-action suits. Because of the regulation’s chilling effect on competition in consumer financial services, as well as evidence showing that class-action suits are often less beneficial to consumers than arbitration proceedings, the rule is particularly harmful to jobs, consumers and the economy.
Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:
“The so-called Consumer Financial Protection Bureau has been doing the exact opposite of what its name suggests since it was created under Dodd-Frank. CFPB’s ‘arbitration rule’ was never about helping consumers, it was about declaring war on small-dollar lenders and funneling hundreds of millions of dollars to trial lawyers at the consumer’s expense. We applaud the Senate for using the CRA to repeal this harmful rule, and a good next step would be to start dismantling the entire agency.”
The “arbitration rule” and the other regulations addressed throughout the year by President Trump and Congress are among the dozens identified in Freedom Partners’ Roadmap to Repeal. Released at the outset of the new administration, this how-to guide details the necessary steps the president and Congress can take to remove harmful regulatory barriers and promote growth and opportunity for all Americans.
Under President Obama, over 600 major regulations were added to the Federal Register at costs exceeding $700 billion.