Public Comment to the CFPB in re: Arbitration Clauses in Consumer-Finance Products
On Monday, August 22, 2016, the Manhattan Institute’s James R. Copland submitted, in his individual capacity, a comment letter to the Consumer Financial Protection Bureau (CFPB) in opposition to a proposed rule which, if adopted, would ban the use of class-action-preclusive arbitration clauses in certain contracts. Mr. Copland argues that the agency has not adequately analyzed the costs of the proposed rule and the likely reduction in consumer access to credit that would result from its final adoption.
In particular, the CFPB has not adequately considered:
- Class Action Costs: the consumer-harming effects of private class litigation;
- Inverse Federalism: the risks in delegating federal consumer markets to states; and
- Banking and Credit Access: the reduction in banking and credit access for vulnerable households.
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James R. Copland is a senior fellow and director of legal policy at the Manhattan Institute. The Manhattan Institute does not take institutional positions on legislation, rules, or regulations.