CUNA joined other organizations Wednesday to strongly oppose numerous bills attempting to prohibit arbitration clauses.

“These attacks on arbitration are inaccurate, unnecessary, and would undermine an important alternative to litigation that has benefited consumers, employees, and businesses for decades, and on which many of them now rely,” the letter reads.

The organizations note arbitration has been an alternative dispute resolution mechanism since the enactment of the Federal Arbitration Act in 1925.

“Unfortunately, there is an organized effort underway to dismantle the arbitration system in favor of bringing claims in the broken class action litigation system,” the letter reads. “Individualized contract-based arbitration is an efficient, effective, and less expensive means of resolving disputes for consumers, employees, and businesses. Multiple empirical studies have shown that those bringing claims in arbitration do just as well as or, in many circumstances better than in court.

“By contrast, studies have also shown that class action settlements frequently provide only a pittance – or many times, nothing at all – to class members while millions of dollars are paid to their attorneys,” it adds.

The letter adds that efforts to declare millions of arbitration provisions unenforceable, with the only beneficiaries class action lawyers who would benefit from the possibility of bringing more class action lawsuits that enrich them while providing little benefit to class members.

The Consumer Financial Protection Bureau’s rule banning arbitration clauses was voided via the Congressional Review Act in 2017.