MINNEAPOLIS -

Arbitration is one of the topics slated for discussion at the Consumer Financial Protection Bureau’s next Consumer Advisory Board meeting on Thursday in Washington, D.C.

And ACA International is among the groups crying foul that the CFPB is considering rules that would ban class action waivers in arbitration agreements in contracts for consumer financial products

Under an outline of proposals released by the CFPB in preparation for a small business review panel earlier this month, officials recapped that the CFPB would prohibit companies from blocking group lawsuits through the use of arbitration clauses in their contracts. The rule would affect creditors and those who provide consumer financial products and services, including credit cards, checking and deposit accounts, certain auto loans, small-dollar or payday loans and private student loans.

ACA International insisted that arbitration has proven to be a cost-effective, efficient, and consumer-friendly mechanism to resolve disputes, and there is little evidence to suggest that consumers will be better off due to the CFPB’s proposals.

In fact, the organization pointed out the vast majority of consumer disputes are resolved informally, before even getting to arbitration or litigation. However, if the CFPB moves forward with regulating arbitration agreements, ACA International chief executive officer Pat Morris warns that many companies will likely abandon arbitration altogether, taking this important option away from consumers, increasing dispute resolution costs for both parties, and significantly contributing to an already over-burdened court system.

 “The CFPB is claiming to help consumers by creating a solution to a non-existent problem,” Morris said. “Under the guise of consumer protection, the CFPB is yet again poised to act in a manner that harms businesses without any meaningful, corresponding societal benefit.

“Eliminating arbitration clauses doesn’t help consumers, companies or our nation’s courts. It only helps to line the pockets of trial lawyers,” Morris added.