Walter Zalenski Quoted in Law360 Article, "CFPB Proposal Could Snuff Out Arbitration Even Without Ban"Walter E. Zalenski
Walter Zalenski was quoted in Evan Weinberger's Law360 article, "CFPB Proposal Could Snuff Out Arbitration Even Without Ban," on May 2, 2016.
The Consumer Financial Protection Bureau is not expected to outright ban arbitration requirements in consumer finance contracts when it releases a hotly anticipated proposal later this week, but the watchdog's actions could ultimately have that effect, experts say.
At a hearing Thursday in Albuquerque, New Mexico, the CFPB is anticipated to release a proposed rule that would bar banks and other firms from including class action bans in their contracts, but would stop short of banning the practice of forcing consumers to arbitrate disputes over credit cards, bank accounts and other types of financial products.
The industry’s argument comes down to a simple matter of arithmetic, according to Buckley Sandler LLP partner Walter Zalenski.
Banks and other consumer financial firms cover arbitration costs, including the majority of costs for consumers who are seeking to recover from the companies. If they also have to pay to fight off class actions, firms would likely be unwilling to shoulder those arbitral costs, he said.
And for consumers, the loss of arbitration as an option could come at a price as well, Zalenski said.