The U.S. Chamber of Commerce, American Bankers Association, American Financial Services Association, Consumer Bankers Association, Financial Services Roundtable, and a coalition of associations located throughout Texas filed a legal challenge to the Consumer Financial Protection Bureau’s (CFPB) anti-arbitration rule. The lawsuit was filed in the Northern District of Texas, Dallas Division.
As outlined in the complaint, the legal challenge rests on several grounds, including that the rule violates the requirements of the Dodd-Frank Act because the CFPB study was flawed and based on biased data, and because the rule is harmful to consumers.
The following is a joint statement from the five national association co-plaintiffs:
“For years, our organizations have tried to work with the CFPB to promote strong consumer protection while maintaining a functional arbitration system. The CFPB’s own study found that arbitration provides more benefits to consumers than class action lawsuits. Unfortunately, the CFPB chose to instead finalize a rule that will harm consumers and businesses by effectively banning arbitration and increasing speculative class action litigation. As Congress continues to consider action within its purview, we are filing this challenge to ensure all legal remedies are utilized to preserve arbitration for consumers. Ultimately, we hope this legal challenge will compel the CFPB to take this misguided rule back to the drawing board. If left unchecked, the CFPB’s rule will harm consumers and businesses alike while providing a financial windfall to the class action plaintiffs’ bar.”