Ecclesiastical arbitration

The question of "arbitration," then, lies at the heart of the matter–its necessity, and also its nature–and the theologians of the magisterial Reformation found themselves having to defend their position on two fronts. On the one side, notable Roman Catholic scholars questioned "both the reliability of the received biblical text when compared to the Vulgate and also its perspicuity, arguing that without the church hierarchy's guidance the unbridled interpretation of these texts would only lead to heresy." The Church could provide this guidance not least because it possessed alongside Scripture (according  to the Council of Trent) oral traditions "concerning both faith and conduct, as either directly spoken by Christ or dictated by the Holy Spirit, which have been preserved in unbroken sequence in the Catholic church" I. Provan, The Reformation and the Right Reading of Scripture (Baylor 2017), 285.

What's striking about this historical description is how subsequent reversals in Catholic theology have rendered obsolete these planks of the Counter-Reformation polemic:

i) It's been a long time since Rome made the Vulgate the gold standard of comparison for the biblical text. Catholicism came around to our side on that issue. 

ii) While debates over perspicuity still rage in popular Catholic/Protestant apologetics, the Tridentine solution has been mothballed. The historical fiction of "oral traditions either directly spoken by Christ or dictated by the Holy Spirit, which have been preserved in unbroken sequence in the Catholic church" was abruptly replaced by Newman's theory of development. 

iii) It's true that in the wrong hands, sola scriptura can lead to heresy. However, it begs the question to make Catholicism the standard of orthodoxy. And sola scriptura can also correct the errors and heresies of Rome. So it cuts in several directions. 

On the other side, supporters of the Radical Reformation…argued strongly for a different arbiter, namely the Holy Spirit in the heart of the believing Christian…The Spirit-filled reader is the proper judge in the exegesis of Scripture. Ibid. 286. 

It's my impression that this has tricked down into the folk theology of many lay fundamentalists. It is used as an intellectual shortcut to sidestep scholarly exegesis. But a basic problem is that it fails to explain the diversity of interpretations.