Earlier this month, the Consumer Financial Protection Bureau proposed rules intended to restore some of those constitutionally granted rights that the Supreme Court has stripped away in recent decades. Faced with the possibility of having to be held responsible for their bad actions, some industry groups are coming out in force against the rules, presenting the same laughably thin argument that consumers ultimately benefit by not being able to sue the companies they do business with.

The latest risible screed against the proposed arbitration rules comes from Thomas Donohue, President and CEO of the U.S. Chamber of Commerce (which is not a governmental agency, but a private industry lobbying organization), whose pro-arbitration blog post effectively hits on the same three flimsy talking points the banks and credit card companies have been repeating.

Myth #1: Class actions don’t pay

Not only do most consumers’ bank accounts and/or credit cards come with arbitration clauses that strip the account holder of their right to sue, almost all of those clauses contain an explicit ban on class actions. So not only do you have to go through an arbitrator, but you must do so individually.

Donohue points to data from the CFPB’s own report showing that the overwhelming majority of class actions fail, and that those that succeed result in a small average benefit to the class members. He also trots out the CFPB’s figure of the $35/class member average payout to pooh-pooh class actions. If that number is so meager, why are these companies trying to fight it?

Let’s use a hypothetical to explain why companies love arbitration and want to do everything to prevent class actions (aside from actually doing things that don’t get them sued).

Company A has 500,000 customers and is illegally overbilling 20% of them who live in a state that outlaws a particular type of fee. That means that all 100,000 of those customers could have a legal dispute with Company A, but they unwittingly signed away their right to sue Company A, and their right to join in any sort of class action. So each of those 100,000 wronged customers must go through the ordeal of finding legal representation, attending arbitration hearings, and then maybe getting a reward.

Problem is, very few lawyers will take on a single consumer’s arbitration dispute because it’s not worth their time. Some arbitration clauses also force the customer into arbitrating their case in a specific venue, so you could have to travel all the way across the country for the possibility of minimal rewards. Arbitration also sets no legal precedent, so even if one customer prevails, another customer might fail using the exact same evidence.

Let’s not forget that a 2008 Supreme Court ruling in Hall Street Associates v. Mattel held that, even when an arbitrator makes a clear legal error that should have resulted in a different outcome, the courts can’t get involved in fixing that mistake.

Given all that information, only a few people out of the possible class of 100,000 plaintiffs would likely seek arbitration against Company A. Let’s be incredibly generous and say 50 wronged customers go through the whole arbitration process. To give you an idea of how unlikely that number is, figure that, between 2010 and 2012 a grand total of 1,847 individual arbitration disputes were filed involving the entire banking, credit, and financial industries.

Let’s further assume that each of these 50 customers prevails and are awarded $5,000 each. In that insanely unlikely and optimistic scenario, Company A is out $250,000, has admitted no wrongdoing, has set no legal precedent, and has gotten away with illegally overcharging 99,950 customers.

Then there’s Company B, which is identical in every way to Company A except it doesn’t use a forced arbitration clause or a ban on class actions.

It only takes one or two of those 100,000 potential plaintiffs to step forward and go through the hassle of finding an attorney to sue Company B in court. Once the class of plaintiffs is certified, the 99,998 other customers don’t have to do anything to make their case.

Using the much-maligned $35/class member figure that Donohue is so quick to trot out: multiply it by the entire class of 100,000 wronged customers. That’s $3.5 million, 14 times the total payout of the incredibly unlikely scenario presented for Company A.

That $3.5 million amount doesn’t include the cut for the plaintiffs’ lawyer, so figure that Company B would actually be on the hook for closer to $8 million in this scenario — 32 times the total of the arbitration scenario — not to mention having been held publicly accountable for its bad behavior.

Myth #2: Blame the trial lawyers

Yes, obviously, as the party that stands to reap the most financial benefit from class actions, trial attorneys have been pushing for an end to forced arbitration.

But to hear the head of the Chamber of Commerce play the lobbyist card against Big Lawyer is worth a guffaw or two.

Total lobbying by the legal industry in 2015 was just north of $13.2 million, with trial lawyer lobbyists at the American Association for Justice responsible for nearly half of that.

Meanwhile, the Chamber of Commerce has spent more than $22 million in just the first few months of 2016.

Let’s not forget about the other industrial lobbyists who have a stake in this game: Commercial banks, who spent nearly $65 million lobbying the government last year, or the credit companies that ponied up $31.5 million in 2015.

All of these organizations — each of which has an interest in companies being able to use arbitration to avoid accountability — heavily outspent the entire legal industry, let alone its biggest lobbyist.

So the fact that the CFPB is putting forth rules that would effectively end forced arbitration in financial services contracts is either a testament to the apparent amazing efficiency of the trial lawyer lobby, or the fact that maybe there’s just something evil about taking away consumers’ rights.

Myth #3: This is all an end-run around Congress and the Supreme Court

Donohue also accuses the trial lawyers and the Obama administration of trying to pass “midnight regulations,” by squeezing an arbitration-killing rule in the backdoor after a divided U.S. Supreme Court affirmed the use of forced arbitration in consumer contracts.

What he fails to mention are the current legislative efforts to end arbitration, including the Restoring Statutory Rights Act or the more recent Justice for Telecommunications Consumers Act, which seeks to specifically end class-action bans on phone, internet, and cable contracts.

These bills — introduced by senators who have indeed received sizable campaign contributions from trial attorneys — stand little chance of even making out of committee, but they are at least attempts to go through the normal legislative process.

Compare that to the recent truly backdoor effort sponsored by pro-arbitration lobbyists, in which a couple of Congressmen tried to slap on a rider on a must-pass piece of legislation that would effectively force the CFPB to redo its entire study.

At the time, Donohue’s group — along with the American Bankers Association, the Consumer Bankers Association, and the Financial Services Roundtable — actively lobbied lawmakers, falsely claiming that the CFPB had not sought proper feedback on the arbitration report, even though it had been open to a public commenting period.

In the end, the pro-arbitration rider was kicked off the spending bill, an indication that maybe lawmakers on Capitol Hill aren’t as enamored with arbitration as Donohue thinks they are.

It seems likely that the Supreme Court will ultimately get to decide whether the CFPB has the authority to stop banks from banning class actions. The industry has thus far given indications that it plans to sue to make sure you can’t.

Recent decisions by the Supremes have come down in favor of forced arbitration, but very narrowly. The 2011 decision in AT&T Mobility v. Concepcion — which held that arbitration clauses and class action bans are enforceable in consumer contracts — was a 5-4 decision.

In 2013, the court split 5-3 in American Express v. Italian Colors, which upheld the enforceability of class actions bans even in cases where the plaintiffs could not possibly afford to mount a case individually. Justice Sonia Sotomayor, who had dissented in Concepcion, recused herself because she had been involved with the case before being appointed to the Supreme Court.

Any industry challenge to the CFPB rules will be heard by a court that is now without one of arbitration’s staunchest defenders, the late Justice Antonin Scalia. His replacement has yet to be named, so it’s likely that his replacement will play a deciding role in determining the constitutionality of the CFPB’s rules.

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