CHARLESTON — West Virginia Attorney General Patrick Morrisey recently led a coalition of AGs urging the Consumer Financial Protection Bureau (CFPB) to withdraw its arbitration rule that attempts to limit companies from including mandatory arbitration clauses in consumer financial agreements.
In an accompanying comment letter, the AGs claim arbitration benefits consumers while not costing much to the companies.
Morrisey, who is leading the initiative, signed the the letter along with attorneys general from Arkansas, Michigan, Nevada, Oklahoma, South Carolina and Texas.
Recently, The West Virginia Record talked with Morrisey spokesman Curtis Johnson about the issue.
Q: Why should CFPB withdraw the proposed arbitration rule?
A: CFPB must comply with the law and this rule fails to meet that standard. Neither the public’s interest nor the CFPB’s study support the proposed rule – two aspects required by law.
Q: How will people benefit from withdrawing the proposal?
A: Withdrawing the rule will allow consumers to maintain the freedom, when deciding between banks or other financial institutions, to choose a provider that offers the consumer’s preferred form of dispute resolution. The proposed elimination of arbitration would take away an option that many consumers may find preferable to litigation in court. For instance, arbitration on average provides consumers with greater recovery in a faster, more efficient and less expensive manner than class action litigation.
Q: Why is the case important?
A: It is important for several reasons. First, this rule is yet another example of the federal government failing to follow the limits of the law. Second, this rule threatens to harm consumers by taking away a form of dispute resolution that CFPB’s own data shows provides important benefits to consumers.
