President Trump “strongly opposes” the newly-passed House bill to prohibit mandatory pre-dispute arbitration agreements and would likely veto such legislation if it makes its way to his desk, the White House said in a strongly worded statement today.

The statement follows close on the heels of House passage of the Forced Arbitration Injustice Repeal (FAIR) Act on Friday, which would prevent broker-dealers and investment advisors from using mandatory arbitration agreements with investors and employees and would even invalidate all existing arbitration clauses. Firms would, however, still be able to offer customers arbitration when a dispute arises.

“If H.R. 1423 were presented to the President in its current form, his advisors would recommend that he veto the bill. These blanket prohibitions will increase litigation, costs, and inefficiency, including by exposing the vast majority of businesses to even more unnecessary litigation,” the White House said.

“As written, the FAIR Act disregards the benefits of resolving disputes through arbitration, including lower costs, faster resolution, and reduced burden on the judiciary. By limiting contractual options, this bill would hurt businesses and the very consumers and employees it seeks to protect,” the White House added.

The House bill would end pre-dispute arbitration agreements for consumer, employment, antitrust or civil rights claims and includes language covering securities or other investments.

If ratified, the legislation would negate the mandatory arbitration clauses in every brokerage and advisory contract. FINRA’s arbitration system currently handles almost all brokerage disputes.

Chances of passage of the bill in the Republican-led Senate are slim, however. In fact, the Senate’s version of the Fair Act doesn’t have one co-sponsor.

“I don’t see the Senate approving this bill, but I can see them coming out with their own version,” said George Friedman, a former director of FINRA arbitration.

Friedman said he thought the House bill needed a good deal of work and would prefer it offer investors the right to choose arbitration at the outset of a relationship rather than after a dispute occurs.

“I have my accounts with Merrill and this statute would retroactively nullify the arbitration clause I signed with them,” said Friedman, who left FINRA six years ago and is now a professor of law at Fordham University and editor of Securities Arbitration Alert.

Friedman said if given the choice by Merrill Lynch now, he would sign the mandatory arbitration clause all over again. “I would sign it absolutely. Court is very expensive and in the state of New York, cases are subject to three levels of appeals. Court cases take a long time and are very costly,” he said.

Another benefit to arbitration, according to Friedman? “FINRA will enforce arbitration as well: If a broker or firm doesn’t pay, they’ll take away your license,” Friedman said.

Christine Lazaro, president of the Public Investors Advocate Bar Association, said it is a misnomer that investors who need an attorney to sue a broker-dealer, won’t need an attorney in arbitration: “I think it is important that investors have the option to resolve disputes in their forum of choice. These contracts force investors to give up their right to a jury trial at the outset of a relationship, when a dispute is pretty inconceivable to investors,” added Lazaro, who runs the securities arbitration clinic for investors  a St. John's University School of Law.

“I think the bill in the Senate is less likely to get out committee, but it is certainly increasing attention on mandatory arbitration and the problems that exist,” she said.

Still, experts on both sides of the issue point to the fact that leading Republicans have stated on the record this year that they want to look at securities arbitration as a window of opportunity for arbitration reform.

At an “Arbitration in America” earlier this year, Senate Judiciary Committee Chairman Lindsey Graham (R-SC) put his concerns bluntly: “The problems we will hear about today bother me…. What’s good for business is not necessarily good for individuals…. It bothers me that when you sign up for a product or service you are giving away your rights. For the rest of this year this Committee will take a long and hard look at how arbitration can be improved. We will try to find some middle ground. We will find a way forward…. There have to be fairness standards.”

This article provided by Bloomberg News.