Consumer groups press CFPB for arbitration crackdown

Several consumer groups recently petitioned the Consumer Financial Protection Bureau for a rulemaking on pre-dispute arbitration.

Petition: Better Markets, the Consumer Federation of America, Public Citizen, and other groups petitioned the bureau to issue a rule addressing the use of mandatory pre-dispute arbitration provisions in contracts between regulated entities and consumers of financial products or services.

Comment Deadline: ICBA will submit comments on the petition by the Nov. 14 deadline.

ICBA View: ICBA has pushed back against efforts to restrict arbitration.

• In a joint letter to the House last year on legislation to effectively ban arbitration provisions in private contracts, ICBA and other groups said pre-dispute arbitration clauses benefit consumers, with studies showing employees prevailed more often, recovered more money, and resolved their claims more quickly in arbitration than in litigation.

• The groups separately told the Senate Banking Committee that arbitration is a fair, effective, and less expensive means of resolving disputes than going to court.