WASHINGTON—NAFCU, along with other industry trade groups, has written to the House of Representatives sharing opposition against the Forced Arbitration Injustice Repeal (FAIR) Act.
The FAIR Act would ban arbitration provisions in private contracts, including credit card agreements.
“The use of pre-dispute arbitration clauses in contracts benefits consumers, small businesses, and employees,” wrote the trade groups. “The only clear beneficiaries of broadly eliminating cost-effective and fair arbitration as a viable way to resolve disputes are class action lawyers, who would directly benefit from increased class action litigation.”
NAFCU noted it has shared concerns related t eliminating the arbitration process in a joint letter to the Senate Banking, Housing, and Urban Affairs Committee in which it had stated “arbitration is a fair, effective, and less expensive means of resolving disputes.”
Benefits Cited
The association further repeated what it said are the benefits of having an arbitration process available for consumers, which include consumers recovering more money, resolving claims more quickly than litigation, and generally finding it easier to navigate than court procedures.
In 2017, the CFPB finalized an arbitration rule that would have prohibited the use of arbitration agreements to limit access to class action litigation. That rule was ultimately overturned by Congress using its Congressional Review Act authority.
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