Twenty-one Democratic state attorneys general wrote to Senate leaders Mitch McConnell and Charles Schumer to express their opposition to S.J. Res. 47, which would nullify the Arbitration Rule issued by the Consumer Financial Protection Bureau under the Congressional Review Act. The AGs requested that both senators oppose the Joint Resolution of Disapproval and vote against it.
As we covered here, the CFPB issued a final Rule on July 10, banning arbitration provisions for covered entities, as well as requiring such entities to provide information to the Bureau regarding any efforts to compel arbitration. Subject to certain enumerated exemptions, the Rule applies to most "consumer financial products and services" that the CFPB oversees, including those companies involved with the storage, transmittal or exchange of money, and "affiliates" of such companies when those affiliates act as service providers.
The Rule prohibits entities from relying on pre-dispute arbitration agreements entered into after March 19, 2018, to avoid class actions concerning covered consumer financial products or services. Starting with the compliance date, consumer arbitration agreements are required to include specified language set forth in the Rule.
Ten days after the Bureau issued the Rule, Sen. Mike Crapo (R-Idaho) introduced S.J. Res. 47, which would set aside the Rule.
Writing under the letterhead of Massachusetts AG Maura Healey, the Democratic AGs urged Sens. McConnell and Schumer to oppose S.J. Res. 47, contending that "[t]he Arbitration Rule appropriately prevents consumer financial services companies from requiring their customers to agree to a contract that waives their right to join a class action filed against the company."
According to the AGs, "most consumers simply lack the time and resources to arbitrate a dispute on their own or to hire an attorney to file a claim on their behalf." The AGs also argued that most consumers find arbitration as intimidating as individual lawsuits and assert that the Rule "would deliver essential relief to consumers, hold financial services companies accountable for their misconduct, and provide ordinary consumers with meaningful access to the civil justice system."
Additional signatories to the letter include attorneys general Xavier Becerra (Calif.), George Jepsen (Conn.), Brian E. Frosh (Md.), Eric Schneiderman (N.Y.), and Mark Herring (Va.).
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