A COALITION CONSISTING of the preeminent national business lobby, several financial services trade groups, and over a dozen business organizations in Texas have banded together — the way individuals might in a class-action lawsuit — to force the federal government to allow them to block class-action lawsuits.
Eighteen groups representing thousands of corporations and banks filed the lawsuit against the Consumer Financial Protection Bureau last Friday in federal court in Dallas. Oddly, they did not attempt to individually resolve the dispute through an arbitration process, which they’ve consistently said yields speedier and better results for those wronged. “Arbitration gives consumers the ability to bring claims that they could not realistically assert in court,” the lawsuit reads.
But for corporations, banding together in courts apparently presents a better option.
The plaintiffs want to overturn the CFPB’s arbitration rule, which would prevent companies from using clauses in financial contracts to force all customer complaints into individual arbitration rather than class-action lawsuits. They claim that the CFPB is unconstitutional, and that the analysis the bureau generated to help finalize the rule was flawed, while denying the companies their proper input. Plus, the arbitration rule harms the public interest, they claim, because “it precludes the use of a dispute resolution mechanism that generally benefits consumers (i.e., arbitration) in favor of one that typically does not (i.e., class-action litigation).”
So, really, they’re doing it for the consumers.
But the dispute resolution mechanism that allegedly doesn’t help ripped-off consumers is effectively the one they’re using.