July 20, 2017
The Electronic Transactions Association applauds Rep. Keith Rothfus and Sen. Mike Crapo for introducing H.J. Res 111 and S.J. Res. 47, two bills which will use the only avenue for Congressional oversight to reverse CFPB’s anti-arbitration rule. ETA is encouraged by the leadership of Rep. Rothfus and Sen. Crapo in recognizing that Congress needs to step in to prevent the detrimental effects this rule will have on consumers and businesses alike.
After all, this CFPB rule will have significant negative effects on consumers. As illustrated in CFPB’s own study, arbitration is a simpler, a more flexible, a faster and a more confidential process than turning to the courts to settle issues. Class-action lawsuits result in millions of dollars in legal fees but provide little or no benefit to consumers. According to the CFPB’s own numbers, an average class action lawsuit member received just $6.29, while the lawyers leading the case received millions. By contrast, arbitration results in much higher awards for consumers. The CFPB’s data establishes that consumers won 47 cents on the dollar in arbitration cases where they received a recovery. Moreover, while trials must be scheduled into busy court calendars, arbitration hearings can be scheduled more easily and during non-business hours.
We encourage Congress to swiftly take up these resolutions and pass them, and we look forward to working with both Rep. Rothfus and Sen. Crapo to advance them.