Republicans, Wall Street Score Victory in Dismantling Class-Action Rule

Reuters discusses the Senate’s CRA vote regarding the CFPB’s anti-arbitration rule with Ted Frank.

Banks, credit card issuers and other financial companies will be able to block customers from banding together to sue over disputes, after the U.S. Senate on Tuesday narrowly killed a rule banning the firms from using “forced arbitration” clauses.

Critics of the rule had said class actions only benefit trial lawyers and arbitration generally wins larger settlement awards for customers. Supporters said forced arbitration harms customers by putting companies in control of the process and taking away the right to sue enshrined in the U.S. Constitution.

“The Senate today prevented a cash grab that would have transferred wealth from consumers to the pockets of wealthy attorneys,” said Ted Frank, director of the center for class-action fairness at the free-market group Competitive Enterprise Institute.

Read the full article at Reuters.