AFSA Comments on Arbitration Hearing
Yesterday, AFSA submitted a comment letter to Senate Committee on Banking, Housing, and Urban Development Chairman Sherrod Brown (D-OH) and Ranking Member Patrick Toomey (R-PA) on the committee’s upcoming hearing regarding arbitration.
AFSA’s letter highlights the important role that arbitration plays for consumers. “Usage of pre-dispute arbitration clauses in contracts benefits consumers, small businesses, and employees,” Ann Harter, AFSA’s Vice President of Congressional Affairs wrote. “Furthermore, courts work to ensure that arbitration agreements of all types are fair and do not provide an untoward advantage to any party.”
Federal law has protected pre-arbitration clauses, helping consumers and businesses resolve issues for nearly a century. In fact, the Consumer Financial Protection Bureau’s (CFPB) on 2015 study found that arbitration costs less, is faster than trials and results in higher monetary outcomes for individuals. The study found average amount received by consumers through arbitration is $5,389. The average received by consumers through class-action lawsuits is just $32.
“The only clear beneficiary of eliminating arbitration clauses are plaintiffs’ trial lawyers who would directly benefit from class action litigation replacing cost-effective and fair arbitration,” Harter continued.
A broad coalition of trade associations also submitted a letter to the committee. AFSA will closely monitor any effort to reduce consumer’s ability to pre-arbitration clauses, the passage of which would result in poorer outcomes for the Americans they purport to help.
March 8th, 2022
