CFPB Updates – 11 March 2015

CFPB Report Claims Arbitration "Less Beneficial To Consumers" than Individual or Class Litigation, Foreshadows Attempt to Impose Restrictions in Future

By Deepa J. Zavatsky

On March 10, Director Richard Cordray of the Consumer Financial Protection Bureau ("Bureau" or "CFPB") presided over a Field Hearing on Pre-Dispute Arbitration Clauses, discussing what he described as the "key findings" of the Bureau's long-awaited 700-page Arbitration Report to Congress published earlier that morning. Reed Smith attorney Deepa Zavatsky attended the hearing, where Cordray expressed the CFPB's view that pre-dispute arbitration is not a "better alternative" to litigation, and he foreshadowed the Bureau's likely adoption of limitations to such mandatory provisions in consumer contracts.