The Consumer Financial Protection Bureau is taking comments until August 22nd on a proposed rule that would prohibit financial services companies from locking consumers into arbitration. The proposed rule that would significantly alter the way class actions are approached by attorneys.

The rule stipulates banning the use of predispute arbitration agreements that contain a class action waiver, a move that would create avenues for consumers to recover for the type of small-scale damages that often go unchecked under the current paradigm.

Alan Kaplinsky, leader of Ballard Spahr's Consumer Financial Services Group, testified three times as an industry representative at CFPB hearings on the rule and urged that the proposed change would leave corporate America spending more than ever to resolve disputes with consumers.

"It's going to mean an avalanche of class actions, an explosion of class actions, which have been relatively tame for the last decade as the result of the use of arbitration and class action waivers," Kaplinsky said.

Kaplinsky pioneered the use of class action waivers in arbitration provisions. He has been anticipating a proposal of this kind because the CFPB has been working up to it for years.

The proposed rule could affect corporate legal work even beyond the introduction of a new group of class actions, he said. Eliminating waivers would make arbitration—and the complex infrastructure required to offer it as an avenue of relief—less enticing to companies, steering all matters to the courts instead, he said.

"If waivers are not permitted, I think most companies will abandon the use of arbitration altogether," Kaplinsky said.

Kaplinsky said that because most consumers involved in class actions receive nothing, the rule would do little to benefit them. The streamlined arbitration process would be gone, leaving longer delays in resolving disputes and costing companies under the CFPB's jurisdiction even more. The benefactors of the proposed rule, Kaplinsky said, are a relatively small group of individuals.

"Everybody is a loser except plaintiffs class action attorneys," he said.