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Consumers win big: Anti-arbitration financially than those who filed class
action lawsuits. The new ruling goes
rule overturned by Congress a long way toward enhancing protec-
tions for consumers (and businesses,
too). Conservative estimates by the
By Heather Petersen CFPB showed that if the previous
National Merchants Association policy had remained in place, it had
the potential to generate more than
ast month, the U.S. Senate made it more difficult to sue the financial 6,000 class action lawsuits, costing
industry by overturning a previous rule enacted by the Consumer businesses $2 billion to $5 billion ev-
Financial Protection Bureau. The rollback of the July 10, 2017, deci- ery five years. Those estimates also
L sion essentially means consumers can once again seek relief through included 604 additional federal class
individual arbitration cases, rather than pursuing drawn out and expensive action lawsuits per year and $523 mil-
class action lawsuits. This latest ruling is great news for consumers and finan- lion in settlement costs, defense costs
cial institutions alike and represents National Merchants Association's belief and trial attorney fees.
that the original decision was unnecessary and would end up doing more A true victory
harm than good.
The action taken by Congress is a vic-
Enhanced protections tory for consumers and small banks
When it was first passed, the anti-arbitration rule was opposed by NMA as across the country because the origi-
well as the Electronic Transactions Association, the U.S. Chamber of Commerce nal anti-arbitration rule would have
and the Treasury Department, and was roundly considered bad for business. exposed thousands of consumer fi-
Furthermore, the original decision was based on a lack of credible evidence nancial products and services pro-
to suggest consumer protections would actually be enhanced by the enforce- viders to class action litigation if not
ment of it. In fact, the CFPB's 2015 study that led to the July decision revealed overturned. The rise in litigation costs
that the majority of consumers who filed arbitration disputes did far better would have undoubtedly been passed
on to consumers, either through
higher prices or reduced quality of
products or services. Additionally, in-
Let Be Your EMV Expert! novation would have been stifled and
new businesses would have been dis-
Your EMV Eco-System Made Affordable! couraged from launching due to class
action risk. National Merchants Asso-
eProcessing Network has the secure, payment solutions to help you stay current with the ciation has long supported the use of
technologies that keep your merchants connected. And with real-time EMV capabilities, arbitration because it provides higher
retailers can not only process contact and contactless payments, Apple Pay and Android Pay, awards more quickly. The recent re-
they’re able to manage their inventory as well as balance their books via QuickBooks Online.
versal will prove the real victors to
be consumers and merchants and not
high-priced, litigation-driven attor-
neys. We will always fight to preserve
the rights and privileges enjoyed by
customers and merchants. As a mer-
is EMV-Certified chant advocacy group dedicated to
keeping costs low everywhere, NMA
commends Congress for listening to
business-friendly voices and helping
to safeguard the future success of
customers and merchants.
Heather Petersen is the CEO of National
Merchants Association, a global leader in mer-
chant payment processing services. National
Merchants Association is a true merchant
advocate, working on behalf of businesses
to eliminate the unnecessary and unreason-
able fees associated with accepting electronic
transactions. Visit www.nationalmerchants.
1(800) 296-4810 com or call 866-509-7199 for more informa-
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