Class act

5 May 2016 By Reynolds Holding Follow @holdingren

The Consumer Financial Protection Bureau is reviving class-action lawsuits as a way to fight unfair fees and other scams. Existing rules often allow only solo cases in arbitration, where lenders get the edge. The masses deserve a better shot at bringing Wall Street to heel.

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The U.S. Consumer Financial Protection Bureau on May 5 proposed new rules to block banks, credit-card companies and other financial institutions from forcing customers to waive their rights to join class-action lawsuits and resolve disputes through private arbitration.

The agency is seeking comments on the plan for barring such companies from including in contracts fine print that requires arbitration in the event of a dispute over checking accounts, credit cards or other products. Such clauses prevent consumers from receiving a fair hearing and compensation through the courts, the CFPB said.

American businesses are expected to oppose the proposal and sue if it becomes final. They say arbitration is more efficient and helps avoid costly litigation that often ends up harming people who file a lawsuit.

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