Here. Excerpt:
* * * Affected businesses are likely to sue (in court, ironically) to try to block [the CFPB arbitration proposal]. In a move that conjures up the famous scene from “Blazing Saddles” in which Cleavon Little takes himself hostage, the financial industry has threatened to abandon consumer arbitration altogether if the regulation takes effect. Thus, the Chamber of Commerce has written of its concern that consumers who have unique $25 claims that couldn’t be heard in class actions wouldn’t be able to arbitrate them.
(Never mind that this imaginary consumer — remember, consumers rarely bring $25 claims — could presumably still sue in small claims court). But even that wouldn’t be a problem unless arbitration benefits consumers; therefore, the industry claims that it does.
Except that it doesn’t. The CFPB study found that, on average, 6.8 million consumers a year obtain relief through settlements in consumer finance-related class actions in federal court. In contrast, it reported, about 600 consumer finance disputes were filed each year with the main arbitration provider. Even if consumers filed and won 1,000 times that many arbitration proceedings a year, federal class actions would still help more than 10 times as many consumers as arbitration in a typical year. That’s why class actions can deter misconduct while arbitration doesn’t.