Trade Groups Submit Comment Letter To CFPB Regarding Its Study On Consumer Arbitration

On July 13, the American Bankers Association, the Consumer Bankers Association, and The Financial Services Roundtable submitted a comment letter to the Consumer Financial Protection Bureau in response to the CFPB's March 10, 2015 Consumer Arbitration Study.

This Arbitration Study has been widely viewed as potentially laying the groundwork for the abolition of mandatory consumer arbitration agreements because the CFPB concluded that there are problems with pre-dispute arbitration clauses in credit card, bank account, and other consumer finance contracts.

Pursuant to Section 1028(b) of the Dodd-Frank Act, the CFPB may prohibit, condition, or limit the use of arbitration provisions in consumer financial services agreements if it finds that doing so is "in the public interest and for the protection of consumers." These trade groups informed the CFPB of their view that the Arbitration Study of mandatory pre-dispute arbitration agreements shows that arbitration has