Yesterday, the U.S. House of Representatives voted 231-190 to overturn the Consumer Financial Protection Bureau’s (CFPB) anti-arbitration rule that would prohibit class-action waivers in virtually all financial consumer-service agreements writes the Wall Street Journal.
The rule would leave many companies unable to fund arbitration processes as they would have to spend more money defending class actions. The CFPB argues that the ban would protect consumers, but according to the agency’s own research, consumers who prevailed in arbitration recovered on average $5,389 while those who joined class actions received $32. Trial lawyers on average raked in $1 million.
“Members of the House took a much-needed step toward checking the power of a rogue agency and its attempt to impose a bad rule on American consumers,” said Lisa Rickard, the president of ILR and David Hirschman, the president of the U.S. Chamber Center for Capital Markets Competitiveness.