The American Banker has run Professor Jeff Sovern’s op-ed, CFPB Arbitration Plan Provokes Dubious Industry Claims. Sovern notes:
[C]ompanies can use class action waivers to block consumer protection laws unless consumer protection laws find a way to block class action waivers.
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Last month, the bureau made public a proposal to block class action waivers in arbitration clauses. A leading advocate for arbitration in the financial industry, Alan Kaplinsky, responded with [a] forecast of how the industry would respond: “We firmly believe that, should the CFPB enact its proposal to ban class action waivers, most companies will abandon arbitration with the result that arbitration will no longer be available as a quick, efficient and inexpensive way of resolving disputes.”
But if the industry truly believes that arbitration is so much better than litigation at resolving disputes, shouldn’t it prefer arbitration to litigation for resolving individual disputes, where there is not a threat of a class action? Or should we be shocked, shocked, to discover the industry’s love of arbitration is about barring class actions?