Skip to content
The Editors

Congress Lets Consumers Down

Allowing contracts that impose mandatory arbitration leaves consumers exposed.
Watch the fine print.

Watch the fine print.

Photographer: Sean Gallup/Getty Images

Congress and the Consumer Financial Protection Bureau have been fighting over the principle of mandatory arbitration -- the idea that companies can make consumers sign away their right to take disputes to court. CFPB proposed a rule to ban this practice, and Congress on Tuesday night struck it down.

This is a bad result, though not because the CFPB rule, as it stood, was the right approach. Adequate and effective redress for consumers should indeed allow for litigation -- but with legal rules well-suited to that purpose, which the U.S. doesn't have. Congress should have left the CFPB rule in place and combined it with tort reform.