In an op-ed for The Hill today, American Bankers Association President and CEO Rob Nichols argued that the Consumer Financial Protection Bureau’s recently finalized arbitration rule was actually anti-consumer — “a regulatory windfall to trial lawyers at consumers’ expense.”
Nichols pointed out that the bureau’s final rule, which requires consumers to have the option of pursuing class action litigation to resolve financial disputes, ignores the CFPB’s own findings on arbitration’s benefits. “Consumers who prevail in arbitration win 166 times what those who prevail in class actions do,” he wrote. “And they get faster relief too — a matter of months, not years.”
Banks and credit unions have long opted for arbitration because it’s the most pragmatic path to the best outcome for all, Nichols added. “It’s faster, cheaper and avoids all the downsides of protracted litigation,” he said. “When customers are in the right, arbitration gets recompense into their pockets as quickly as possible.” Nichols called on Congress to use its powers under the Congressional Review Act to overturn the final rule as quickly as possible.