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.
