Consumer Financial Services Law Blog
Dykema Gossett PLLC
Dykema Gossett PLLC

Consumer Financial Services Law Blog

Consumer Financial Services Law Blog

News and analysis regarding Consumer Financial Services litigation and regulation, and activities of the Consumer Financial Protection Bureau

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Showing 5 posts in Arbitration.

CFPB Releases Arbitration Proposal

Today, the Consumer Financial Protection Bureau (the “CFPB”) released much-anticipated proposed rules for mandatory arbitration clauses, which the CFPB colloquially refers to as “contract gotchas.” The proposed rules follow on the heels of the CFPB’s March 2015 Arbitration Report, which the CFPB concluded demonstrates that mandatory arbitration clauses are detrimental to consumers. As expected, the proposed rules evidence the CFPB’s concerns around mandatory arbitration clauses. Read More ›

CFPB Proposes Effective Ban on Class Waivers in Arbitration Agreements

Just this week, the CFPB announced that it is considering proposing rules that would “ban consumer companies from using ‘free pass’ arbitration clauses to block consumers from suing in groups to obtain relief.” The proposals being considered would not ban arbitration clauses in their entirety. Among the proposals, arbitration clauses would have to explicitly state that they do not apply to cases filed as class
actions unless and until the class certification is denied by the court or the class claims are dismissed in court. The proposals also seek more oversight of the arbitration process by requiring companies that use arbitration clauses for individual disputes to submit information to the CFPB regarding the arbitration claims filed and awards issued. Read More ›

Democrats Push End to Mandatory Arbitration

On Thursday, May 21, 2015, fifty-eight Democratic members of Congress pushed the Consumer Financial Protection Bureau (“CFPB”) to prohibit mandatory arbitration clauses in consumer financial contracts. The clauses, which Democrats argue unfairly deprive consumers of their day in court, are often included as standard language in contracts for regularly utilized products such as credit cards and banking accounts. Read More ›

The American Arbitration Association’s Consumer Claims Registry Goes into Effect September 1, 2014

The American Arbitration Association (AAA) has overhauled its Consumer Rules to spell out in greater detail the procedures that will govern their consumer arbitrations.  As part of its overhaul, the AAA has mandated that, as of September 1, 2014, businesses that include arbitration clauses in consumer contracts must submit their clauses for review and registration with the AAA’s new Consumer Clause Registry.  The Registry was created to provide additional access to information about the AAA’s consumer arbitration services and to list businesses that are authorized to enlist AAA’s services.  Beginning September 1, AAA will not arbitrate any claim pursuant to an arbitration clause, unless that clause has been registered and reviewed for a fee. Read More ›

CFPB Proposed Arbitration Study Receives Criticism from Industry and Consumer Groups

In June 2013, the CFPB put credit card issuers and servicers on notice that it was planning to investigate consumer experience with mandatory arbitration agreements. With the proposed survey, the CFPB planned to elicit feedback regarding the effect of dispute resolution provisions on consumer choice of credit cards and consumers’ default assumptions regarding their dispute resolution rights, including their awareness, understanding, and valuation of certain resolution options. The information would be gathered through a telephone survey of 1,000 credit card holders. Dodd-Frank Act section 1028 mandates the CFPB conduct an arbitration study and the finding could result in new and far-reaching regulation of consumer financial products. The CFPB is authorized to regulate the use of dispute resolution agreements in the context of consumer financial products and services. Based on public comments, a revised proposed survey was published in May 2014. Read More ›