What Are Class Action Waivers Worth? A New Study Looks to the Stock Market for Answers

In the episode of the Consumer Finance Monitor podcast released today, the host of the show, Alan Kaplinsky (founder, former leader for 25 years, and now Senior Counsel of our Consumer Financial Services Group) spoke with James Fallows Tierney, Associate Dean for Academic Affairs and Associate Professor of Law at Chicago-Kent College of Law, about his working paper, "The Value of Class Action Waivers: Evidence from Invalidation of the CFPB Arbitration Rule." Professor Tierney's research focuses on the intersection of law, financial markets and consumer finance.

His study uses financial-market data to examine how investors reacted to developments affecting the enforceability of consumer arbitration agreements containing class action waivers.

Key Points Discussed:

· An Eight-Year Project

· Letting the Market "Speak"

· What Did the Study Find?

· What About Consumers?

· Important Limitations

· A Different Way of Looking at an Old Debate

Listen to the full Consumer Finance Monitor podcast with Professor James Fallows Tierney to hear our discussion of his methodology, the 11 events examined in the study, the stock-market reaction to Congress's repeal of the CFPB arbitration rule, the study's limitations, and where this research could go next.

Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.