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Category Archives: Arbitration

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New empirical study of AAA arbitrations is a study in contradictions

Posted in Arbitration

A new empirical study of approximately 5,000 American Arbitration Association (AAA) consumer arbitrations conducted between 2009 and 2013 purports to find a “repeat player” effect favoring companies that previous researchers, including the Consumer Financial Protection Bureau (CFPB) itself, have not discerned.  In an article to be published later this year in the Georgetown Law Journal,… More >

Lawmakers urge CFPB to reopen arbitration study

Posted in Arbitration

A group of more than 80 House and Senate Republicans have sent a letter to Director Cordray asking the CFPB to reopen its arbitration study.  The CFPB released the final results of its empirical study of consumer arbitration as mandated by Section 1028 of the Dodd-Frank Act in March 2015. In their letter, the lawmakers… More >

House appropriations amendment would create new requirements for CFPB arbitration rule

Posted in Arbitration

According to a Politico report, the House Appropriations Committee has approved an amendment to the FY 2016 Financial Services Appropriations bill that would impose new requirements on the CFPB before it can issue a rule governing arbitration agreements.  The amendment, which was introduced by Republican Representatives Steve Womack and Tom Graves, reportedly would require the… More >

Trade groups urge CFPB to solicit public comments on arbitration study

Posted in Arbitration

Five leading financial services industry trade groups have sent a letter to the CFPB urging it to solicit public comments on the final results of its arbitration study before deciding whether to initiate a rulemaking proceeding pursuant to Section 1028(b) of the Dodd-Frank Act.  The groups are the American Bankers Association, American Financial Services Association, Consumer… More >

Sovern v. Kaplinsky

Posted in Arbitration

In its study of consumer arbitration dated March 10th, the CFPB concluded that relatively few consumer arbitrations have been filed.  In a recent Consumer Law & Policy blog, Professor Jeff Sovern states that he is “skeptical” of my position that the CFPB’s conclusion can be explained, in part, by the fact that most consumers use… More >

CFPB Holds Field Hearing On Arbitration Report

Posted in Arbitration, CFPB General

On March 10th, the CFPB held a public field hearing in Newark, New Jersey to address the release of its arbitration report to Congress. The event featured opening remarks from Director Richard Cordray, as well as commentary from consumer groups, industry representatives and members of the public. According to Director Cordray, the report was based… More >

The CFPB’s final arbitration study: what’s the real story?

Posted in Arbitration

Yesterday, the CFPB delivered to Congress the final results of its empirical study of consumer arbitration as mandated by Section 1028 of the Dodd-Frank Act.  It has been widely reported that the final results show that arbitration agreements are detrimental to consumers.  However, after a careful reading of the 728-page study, we found that it… More >

CFPB releases final arbitration study results

Posted in Arbitration

As expected, the CFPB today released final results of its consumer arbitration study as mandated by Section 1028 of the Dodd-Frank Act.  Section 1028 provides that the CFPB, “by regulation, may prohibit or impose conditions or limitations on the use of” pre-dispute arbitration agreements concerning consumer financial products or services if it finds doing so “is… More >

CFPB to hold field hearing on arbitration

Posted in Arbitration

The CFPB has announced that on Tuesday, March 10, 2015, it will hold a field hearing in Newark, N.J. on arbitration. The hearing will feature remarks from Director Cordray, as well as testimony from consumer groups, industry representatives, and members of the public. Our expectation that the CFPB would issue its arbitration study in early… More >

Waiting for the CFPB’s arbitration study

Posted in Arbitration

“Waiting for the CFPB’s arbitration study” isn’t the title of a new play but it does describe the study’s status as we enter the final hours of 2014. Since the CFPB sent letters to payday lenders in August 2014 demanding copies of certain of their standard loan agreements for use in connection with the arbitration… More >

Further Thoughts on the St. John’s Consumer Arbitration Study

Posted in Arbitration

Jeff Sovern, through his Consumer Law & Policy Blog, recently responded to our criticism that the St. John’s study didn’t include arbitration provisions with opt-out features. Jeff makes the point that since consumers don’t understand the significance of arbitration provisions, they would not understand what they are opting out of. While we (and the more… More >

Some thoughts on the St. John’s School of Law’s analysis of consumer understanding of arbitration agreements

Posted in Arbitration

Following on the heels of the Pew Foundation’s survey of consumer attitudes towards arbitration and the CFPB’s on-going empirical study of consumer arbitration, a group of professors from St. John’s University School of Law recently conducted an empirical study purporting to explore the extent to which consumers are aware of and understand the effect of… More >

OMB gives go-ahead to CFPB telephone survey of consumers for arbitration study

Posted in Arbitration

Over the vigorous objections of industry trade groups, on September 4, 2014, the Office of Management and Budget (OMB) approved the CFPB’s request to conduct a national telephone survey of 1,000 credit card holders as part of its study of the use of mandatory pre-dispute arbitration agreements in connection with consumer financial products and services…. More >

Industry trade groups urge OMB not to approve CFPB arbitration telephone survey

Posted in Arbitration

Three prominent industry trade groups are urging the Office of Management and Budget (OMB) not to approve the CFPB’s proposal to conduct a national telephone survey of 1,000 credit card holders as part of its study of the use of mandatory arbitration agreements in connection with the offering of consumer financial products and services.  After… More >

CFPB arbitration study to be completed this year

Posted in Arbitration

We have previously blogged about the ongoing arbitration study which the CFPB is conducting under Section 1028 of Dodd-Frank. Yesterday, Will Wade-Gery (who is managing the study for the CFPB) spoke at the 19th Annual Consumer Financial Services Institute (which I co-chair) in Chicago. Mr Wade-Gery provided an update regarding the status of the study…. More >

CFPB official confirms larger participant rule for auto finance coming soon

Posted in Arbitration, Auto Finance, CFPB Exams

Today is the final day of CBA Live 2014, which is being held at the Gaylord Hotel in National Harbor, MD.  I spoke at a program yesterday about the CFPB’s ongoing arbitration study under Section 1028 of Dodd-Frank.  Based on the CFPB’s December 12, 2013 partial release of data, I have predicted that the CFPB will, at a minimum,… More >

CA federal court rejects challenge to CFPB’s constitutionality

Posted in Arbitration, CFPB General

The California federal district court hearing the CFPB’s enforcement action against Morgan Drexen has rejected Morgan Drexen’s challenge to the CFPB’s constitutionality.  Although similar challenges have been made in other cases, this appears to be the first decision to rule on the merits of such a challenge.  The CFPB’s enforcement action followed the filing of… More >

Preliminary arbitration study results: is the Bureau keeping an open mind?

Posted in Arbitration

Following up on our earlier post, we have now had a chance to review the CFPB’s 168-page report containing some preliminary results of its consumer arbitration study.  Our responses to some of the Bureau’s specific findings can be accessed here.  While we are encouraged that the Bureau recognizes the importance of studying the relative benefits… More >