November 6, 2017
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Industry Celebrates Defeat of Arbitration Ban
Photo by Jeffrey Bellant CELEBRATING A WIN: National Independent Automobile Dealers Association CEO Steve Jordan tells the crowd at the recent National Alliance of Buy-Here, Pay-Here Dealers conference about the successful vote to block the Consumer Financial Protection Bureau’s arbitration ban. By Ted Craig & Jeffrey Bellant
The U.S. Senate passed a resolution that blocks the Consumer Financial Protection Bureau’s arbitration ban, with Vice President Mike Pence casting the deciding vote to break the 50-50 Senate deadlock. The resolution uses the Congressional Review Authority to block the CFPB’s ban on mandatory arbitration agreements in inance contracts. These agreements are used by inance providers – including auto creditors and buy-here, pay-here dealers – to prevent consumers from joining class-action lawsuits.
The House already passed its version of the resolution. There was some concern the Senate would let the rule take efect following the recent scandals at Wells Fargo and Equifax. The vote was almost entirely along party lines, except for Republican Senators Lindsey Graham and John Kennedy breaking ranks and voting with the Democrats. “This is good news for the American consumer,” said Arkansas Sen. Tom Cotton after the vote. “The repeal of this regulation is a good irst step toward reining in a rogue agency.” Industry leaders announced the
result of the Senate vote on the arbitration issue during a recent industry event and dealers in attendance applauded the news. Steve Jordan, CEO of the National Independent Automobile Dealers Association, said it’s a big win for the industry. It was one of the issues that the NIADA has lobbied for during its annual treks to Washington for its Day on the Hill events. “This is monumental,” said Paul John, executive director of the Georgia IADA. “This is a huge win.” The ban came after the CFPB conducted a study on the efect of ar-
bitration on consumers. This study was mandated in the bill that originally created the regulator. Shaun Petersen, senior vice president of legal & government afairs, said the CFPB’s own study showed the arbitration rule would also have been bad for consumers. “Their own data suggested that consumers were not getting the beneit of class action lawsuits,” Petersen said. “They did better through arbitration than class action lawsuits.” A U.S. Treasury Department study of the data and the CFPB’s ruling back up Petersen’s claims. Continued on page 5
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