U.S. Chamber: CFPB Announces “Biggest Gift to Plaintiffs’ Lawyers in a Half Century”

Thursday, May 5, 2016 - 11:45am

WASHINGTON, D.C. — Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), and David Hirschmann, president and CEO of the U.S. Chamber Center for Capital Markets Competitiveness (CCMC), made the following statement today on the Consumer Financial Protection Bureau’s (CFPB) proposal to effectively prohibit class action waivers in consumer financial services contracts:

“The CFPB is proposing to give the biggest gift to plaintiffs’ lawyers in a half century—at the expense of the consumers the agency is charged with protecting.

“In the 50 years since the advent of modern day class action lawsuits, plaintiffs’ lawyers have made millions of dollars in fees from these suits while consumers often receive little benefit. With this rule, the CFPB has doubled down on that trend. 

“The proposed rule is a wolf in sheep’s clothing. The CFPB’s own study concludes that arbitration empowers consumers to resolve disputes easily and quickly on their own without having to hire a lawyer.  Nevertheless, the CFPB’s rule will have the practical effect of eliminating arbitration for most consumers. Now the agency designed to protect consumers is proposing a rule that will end up hurting them.

“Effectively eliminating arbitration has been the plaintiffs’ lawyers top priority for several years. Unable to accomplish this through legislation, they have enlisted the CFPB to do it through regulation. 

“The CFPB should go back to the drawing board.  Its mission is to protect consumers, not enrich trial lawyers.”

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.

Since its inception in 2007, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems that have governed our capital markets. The CCMC is committed to working aggressively with the administration, Congress, and global leaders to implement reforms to strengthen the economy, restore investor confidence, and ensure well-functioning capital markets.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.