ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Compliance and Risk

ABA: Proposed Arbitration Rule Not in Public Interest

August 22, 2016
Reading Time: 2 mins read

The American Bankers Association and other trade groups today urged the Consumer Financial Protection Bureau not to move forward with its proposed rule on arbitration, arguing that the rule is not in the public interest, does not protect consumers, and is inconsistent with the bureau’s own study of arbitration of consumer financial products and services.

By prohibiting customers from waiving their ability to participate in class action suits, the proposed rule would permanently increase the number of class action lawsuits by the thousands and raise legal costs by up to $5.2 billion over five years, according to the bureau’s own estimates. Many banks include mandatory arbitration clauses in their credit card and deposit account agreements in order to manage the unpredictable costs of class action lawsuits.

“It is consumers who will truly suffer if the proposed rule becomes final,” ABA and the other groups said. “As taxpayers, they will pay for the increased costs to the court systems required to handle the…additional class actions. As litigants, they will suffer increased court backlogs that long delay resolution of their cases. As customers of the providers, they will be saddled with higher prices and/or reduced services, because the billions of dollars in additional class action litigation costs will be passed through to them in whole or in part.”

With arbitration likely to disappear under the rule, ABA said, the CFPB would also impose burdens on customers whose claims cannot be resolved through class actions, instead requiring them to go to court for minor, non-systemic disputes. As ABA has noted on multiple occasions, the bureau’s own study found that arbitration is fair, as well as “faster, more economical and more beneficial to consumers than class action litigation.”

In a separate letter, the American Bankers Insurance Association emphasized that the CFPB lacks authority to impose rules on “policy loans,” which are part of the business of insurance and regulated at the state level. For more information, contact ABA’s Nessa Feddis or Jess Sharp or ABIA’s Sarah Ferman.

ADVERTISEMENT
Tags: Arbitration
ShareTweetPin

Related Posts

ABA, associations urge lawmakers to finalize deal on debt ceiling

House passes bills on stablecoins, digital assets, CBDCs

Cybersecurity
July 17, 2025

The House voted in favor of two bills to create a regulatory framework for payment stablecoins and digital assets. House members also voted in favor of a separate bill to ban the Federal Reserve from issuing a CBDC.

Business inventories rise in February

Business inventories hold steady in May

Economy
July 17, 2025

Business inventories in May came in at $2.66 trillion, virtually unchanged from the month prior but up 1.7% from a year ago, the Commerce Department said.

Mortgage rates fall

Mortgage rates rise

Economy
July 17, 2025

The rate for a 30-year fixed-rate mortgage was 6.75% this week. The rate for a 15-year fixed-rate mortgage was 5.92%.

The future of careers in risk and compliance

The future of careers in risk and compliance

ABA Banking Journal Podcast
July 17, 2025

What does the future hold for bank risk and compliance professionals? Krysti Cunningham discusses the technological transformation in risk and compliance at community and midsize banks and applications for AI tools and LLMs in risk and compliance.

BIS: Stablecoins fail as ‘sound money’

ABA urges lawmakers to include safeguards in stablecoin bill

Compliance and Risk
July 17, 2025

A durable regulatory framework for stablecoins must balance the potential for enhancing payments with the need to limit negative economic consequences, promote financial stability and guard against consumer protection risks, ABA President and CEO Rob Nichols said in...

Home builder confidence unchanged in April

Home builder confidence rises in July

Economy
July 17, 2025

Builder confidence in the market for newly built single-family homes was 33 in July, up one point from June, according to the NAHB/Wells Fargo Housing Market Index. Builder sentiment has now been in negative territory for 15 consecutive...

NEWSBYTES

House passes bills on stablecoins, digital assets, CBDCs

July 17, 2025

Business inventories hold steady in May

July 17, 2025

Mortgage rates rise

July 17, 2025

SPONSORED CONTENT

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

July 1, 2025
AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025
Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025

PODCASTS

The future of careers in risk and compliance

July 17, 2025

Breaking down the bank-related provisions in the big budget bill

July 10, 2025

Podcast: Inside ABA’s new Treasury Check Verification System API

June 25, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.