Cornyn: CFPB Arbitration Rule Hurts Consumers
by John Cornyn on October 26, 2017 at 10:03 AM
Recently on the Senate floor, I urged my colleagues to overturn the Consumer Financial Protection Bureau (CFPB) rule banning the use of arbitration. Excerpts of my remarks are below, and video of my remarks can be found here.
This rule that the CFPB issued bans using arbitration. Now, arbitration is a widely accepted method of resolving disputes between consumers and banks and other financial institutions. And it actually increases the benefit that flows to the consumer, as opposed to the alternative, which is class action lawsuits, which enriches lawyers where consumers get pennies on the dollar. The CFPB’s own data shows the rule would transfer hundreds of millions of dollars from businesses to plaintiffs' lawyers over the next five years.
Thankfully, we have the power of the Congressional Review Act to overturn the rule.
I'd urge my colleagues to repeal the CFPB arbitration rule so we can get rid of this harmful regulation that imposes obvious costs and offers invisible benefits.