Chamber, Banks, Sue To Retain Mandatory Arbitration

The U.S. Chamber of Commerce and a group of banks filed suit in Texas on Sept. 29, in an 11th hour attempt to block a new rule by the Consumer Financial Protection Bureau allowing consumers to file class actions against credit card companies. The Chamber’s suit claims to be consumer-friendly, because arbitration gives consumers the ability to bring claims they “could not realistically assert in court, including the small and individualized claims that they care the most about. In contrast, class-action litigation is significantly less effective than arbitration in addressing consumer claims.” In a recent New York Times op-ed, Richard Cordray, CFPB director, called it “the height of hypocrisy for companies to claim they’re helping consumers by closing off the very same legal option they use when they’ve been wronged.” The House passed legislation to block the rule this summer, but the Senate, preoccupied with health care and now taxes, hasn’t dealt with the issue, and financial industry officials worry that opportunities to push the legislation through are dwindling.