Law Professors, Business Groups Spar Over Proposed Consumer Arbitration Ban
Almost 170 law professors signed a Nov. 14 letter urging the CFPB to take action on a September rulemaking petition submitted by nine consumer advocacy groups. The petition claims the CFPB must meet its statutory obligation to act in consumers' interest by making sure that financial institutions' clients are not made to waive their rights without realizing what they are giving up.
For her Reuters column, Alison Frankel made note of a counter letter from Alan S. Kaplinsky—whom she called "an arbitration pioneer"—Mark J. Levin, and Cornell University law professor David Sherwyn in which the three co-authors argue that if the CFPB were to depend on its "non-specific Dodd-Frank power to prevent abusive practices," it would be setting itself up for challenge under the Supreme Court's major questions doctrine. That doctrine bans agencies from adopting wide-ranging new regulations without Congressional approval.
Mr. Kaplinsky is a nationally regarded authority on the CFPB and is the former longtime Practice Leader of Ballard Spahr's Consumer Financial Services Group, of which Mr. Levin is a member.
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