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May 18, 2016

WSJ Editorial Rips CFPB for Misreporting Arbitration Study

The Wall Street Journal rips the Consumer Financial Protection Bureau (CFPB) for misreporting the results of the agency’s own study in its bid to outlaw consumer arbitration.

In rolling out that proposed ban, the CFPB claimed that its study “found that class actions provide a more effective means for consumers to challenge problematic practices by these companies.”

The editorial, however, points out that Todd Zywicki of the Mercatus Center and Jason Johnston of the University of Virginia analyzed the CFPB’s report and found that “the average class member receives a whopping $32 from a settlement.”

“Rest assured the lawyer’s cut is not capped at 32 bucks,” concludes the editorial.

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