Rutledge: CFPB Arbitration Rule Harms Consumers
LITTLE ROCK – Arkansas Attorney General Leslie Rutledge is calling on the Consumer Financial Protection Bureau (CFPB) to withdraw its proposed 377-page arbitration rule that seeks to limit companies and providers from including mandatory arbitration clauses in consumer financial agreements and requires those companies and providers to submit arbitration proceeding records to the CFPB.
In a comment letter to the CFPB, seven attorneys general argue that the CFPB’s proposal is not consistent with the findings of a March 2015 study that said arbitration benefits consumers with its modest cost and expeditious pace. The CFPB's proposal to artificially restrict the availability and use of arbitration actually hurts consumers instead of helping them.
“The proposal exceeds the CFPB’s statutory authority and fails to advance consumer protection or the broader public interest,” the attorneys general write. “The proposal should be withdrawn.”
“The CFPB wants to insert itself into an area of the marketplace that has allowed consumers and companies to settle disputes at lower costs and at a faster pace,” said Attorney General Rutledge. “As the chief consumer advocate for Arkansans, I do not want the government implementing a policy that will force citizens into more class action lawsuits and pad the wallets of trial lawyers. Moreover, the CFPB is pushing this rule after its own study concluded it was not necessary. I will continue to monitor this rule, and I urge the CFPB to withdraw it.”
Led by West Virginia Attorney General Patrick Morrisey, Rutledge is joined in the comment letter by attorneys general from Michigan, Nevada, Oklahoma, South Carolina and Texas.
In a column in The Hill newspaper, officials with the U.S. Chamber of Commerce note that the rule will enrich trial lawyers, not protect consumers saying, “The Bureau misleadingly styles its proposal as one to regulate arbitration agreements. The truth is that the proposal is very intentionally designed for the singular goal of promoting class action lawsuits — the number one policy priority of the trial bar. The Bureau’s next step will be to finalize the misguided rule and extinguish consumers’ ability to resolve simple financial services disputes outside the broken class action system.”
About Attorney General Leslie Rutledge
Leslie Carol Rutledge is the 56th Attorney General of Arkansas. She is the first woman and first Republican in Arkansas history to be elected to the office. Since taking office, she has begun a Mobile Office program, a Military and Veterans Initiative, a Metal Theft Prevention program and a Cooperative Disability Investigations program. She has led efforts to teach Internet safety, combat domestic violence and make the office the top law firm for Arkansans. Rutledge also re-established and co-chairs the National Association of Attorneys General Committee on Agriculture.
A native of Batesville, she is a graduate of the University of Arkansas and the University of Arkansas at Little Rock William H. Bowen School of Law. Rutledge clerked for the Arkansas Court of Appeals, was Deputy Counsel for Gov. Mike Huckabee, served as a Deputy Prosecuting Attorney in Lonoke County and subsequently was an Attorney at the Department of Human Services before serving as Counsel at the Republican National Committee. Rutledge and her husband, Boyce, have a home in Pulaski County and a farm in Crittenden County.