Jeb Hensarling

Banks likely to sue to deny consumers their right to sue

Consumer Financial Protection Bureau Director Richard Cordray

Banks keep saying over and over that arbitration proceedings, as opposed to class-action lawsuits, are the best way for consumers to handle disputes.

Yet faced with the prospect of no longer being able to deny consumers the right to sue them, the banking industry is expected to take the deliciously ironic step of suing the federal government.

At issue is a proposed rule from the Consumer Financial Protection Bureau that would prohibit financial-services firms from placing clauses in contracts stipulating...