Repeal The CFPB’s Anti-Consumer Ban On Mandatory Arbitration Clauses

Last week, the Consumer Financial Protection Bureau (CFPB) issued a rule prohibiting banks, credit-card companies, and other financial institutions from including mandatory arbitration clauses in new contracts. The CFPB claims to have struck a blow for consumer rights, but the truth is, this rule will be a boon to frivolous lawsuits—and a drag on our economy.

Today, when you get a new credit card or open a savings account, you likely sign a contract stipulating that, should a dispute arise between you and the company, you both agree to submit it to an independent third party known as an arbitrator. Arbitration is 12 times faster than litigation, according to a study by the CFPB itself—and, on average, it results in bigger awards for the people who bring disputes.