Alan Kaplinsky, one of the nation's most well respected banking and consumer financial services attorneys, said that the recent decision by the National Arbitration Forum to stop taking cases is a stunning loss for consumers, courts, and the national banking industry.

The NAF, under pressure from the Minnesota Attorney General, agreed to stop administering all arbitrations except for internet domain name disputes by the end of this week. The nation's only other major arbitration agencies – the American Arbitration Association and JAMS – cannot handle consumer collections in any appreciable volume, leaving a vacuum in the marketplace.

"This is devastating news for consumers and the banking industry," said Mr. Kaplinsky, a pioneer in the use of arbitration to resolve consumer disputes. "The move eliminates a cheaper, more efficient and consumer-friendly way to resolve consumer debt. In addition, this will place a staggering burden on the courts, which will have to absorb thousands and thousands of cases that had been diverted to arbitration."

Last week, Minnesota Attorney General Lori Swanson sued the Minneapolis-based NAF for violating the state's deceptive trade practices law. Today, Ms. Swanson announced that she sent a letter to the AAA, asking it to play a "leadership role" by refusing to accept arbitration filings on consumer credit and collection matters arising out of mandatory pre-dispute arbitration clauses.