On the recordJuly 25, 2017
As Chairman of the Judiciary Committee, I have worked long and hard to preserve the availability of fair, affordable arbitration to consumers. Hearings before the Judiciary Committee have demonstrated repeatedly that arbitration allows consumers to resolve disputes quickly, fairly and at lower costs than litigation. It also helps consumers to preserve relationships with companies with whom they contract, by avoiding the acrimony of litigation. The Consumer Financial Protection Bureau's Arbitration Rule threatens to undo all of that, not to benefit consumers, but to benefit one special interest--the plaintiffs class-action trial bar. By prohibiting consumers and companies from contracting to arbitrate individual matters, rather than litigate disputes through class actions, it ensures a steady stream of class-action litigation--and handsome class-action attorneys' fees--for the trial bar. But for consumers, it burdens their freedom of contract, subjects them to long, drawn-out class-action litigation, and sets up scenarios in which large portions of any recoveries they obtain will go, not to them, but to class-action lawyers with whom they are forced to deal. For companies, meanwhile, the Rule threatens to force them into choosing whether to continue to fund their arbitration programs or, instead, to shutter those programs to preserve funds for high-dollar class-action defense.…
