The National Independent Automobile Dealers Association has actively entered the fight against a controversial new regulation. In a newly released video, the NIADA encouraged its members to ask members of Congress to support an overturn of the Consumer Financial Protection Bureau’s rule limiting – or perhaps even barring – arbitration in new loan agreements.
Some of the points the NIADA wants its members to consider are:
- Arbitration is faster, more efficient and cheaper for consumers. Arbitration disputes usually get resolved within a matter of months, where class action cases can take years to get through crowded court dockets.
- Consumers get a better outcome in arbitration than in class actions. Even the CFPB’s research shows consumers’ average recovery in arbitration was more than $5,000 compared to less than $33 in class action cases.
- The rule will result in added costs to dealers, which will be passed on to customers. This will result in higher costs of cars and credit.
- The increased cost of credit will hurt credit-challenged customers more than anyone else.
- The biggest winners in class-action lawsuits are attorneys, who pocket millions of dollars in the settlements. The CFPB expects consumers to file more than 1,200 new class action lawsuits each year under the new rule.