A conservative group is challenging the Consumer Financial Protection Bureau’s proposed rule banning class-action waivers in financial contracts, saying the agency failed to provide enough data to support its premise.
Cause of Action Institute says in a filing with the CFPB that the agency violated the Administrative Procedure Act and the Information Quality Act by disseminating a 728-page report that purports to show how class actions benefit consumers, when it actually demonstrates the opposite. Critics say the report ignores strong evidence that class actions are costly and ineffective at distributing benefits to consumers compared with individual arbitration, a quicker process where companies frequently pay all the costs of litigation. Read more
