Conservative Challenge to CFPB Proposed Arbitration Ban

The Consumer Financial Protection Bureau has proposed a rule that would ban class-action waivers in financial contracts, laying out its position in a 728-page report that says class actions provide more benefit to consumers than individual arbitrations. Now, citing a study by researchers from the University of Virginia School of Law and the Antonin Scalia Law School at George Mason University, a conservative group is opposing the CFPB’s initiative with a filing that challenges both the validity of that report’s conclusions, calling them “arbitrary and capricious, and the right of the CFPB to disseminate it. Meanwhile, a company has challenged the constitutionality of the Bureau itself, in a case that is currently before the DC Court of Appeals. In a Forbes article about these cases, reporter Daniel Fisher taps a number of administrative law experts for a prognosis. Challenging a regulation on the basis of its research and conclusions, says one of them, will be “a hard lift.”