Chamber of Commerce Pushes Back Against CFPB on Arbitration

Today's NY Times reports:

The U.S. Chamber of Commerce and others have said the [CFPB]’s findings do not support its proposed rules. “By ignoring its own data that clearly shows major deficiencies with court-based litigation and disregards the real-world advantages of arbitration, the C.F.P.B. has demonstrated its bias for trial lawyers over average Americans,” Mr. Webb, of the chamber’s Institute for Legal Reform, said.

Considerable sums of money are at stake. Late last month, the bond-rating firm Moody’s Investors Service warned that if enacted, the bureau’s proposed rule might leave companies more vulnerable to class actions that could “force changes to company practices that cut into revenues” or “draw regulatory scrutiny.”

Separately, the NY Times writes "the Justice Department issued a proposal to protect military service members from arbitration requirements. Earlier this month, Senator Al Franken, Democrat of Minnesota and a longtime opponent of arbitration, renewed his push for Congress to pass a bill he introduced this year that would prevent companies from requiring employees to go to arbitration."

Arbitration Clauses in Military Servicemembers Credit Agreements

The New York Times reports:

The changes, which are being proposed by the Defense Department, would strengthen protections for military members by vastly expanding the kinds of credit covered by the law’s interest rate cap. The proposal also requires that creditors enhance their disclosures to military members, mandating that the lenders tell military members that they should first try to find alternatives to the costly forms of credit.

 

Creditors could also no longer require service members to agree to arbitration, a concession that would strip borrowers of their rights to fight in court.