The CFPB recently released preliminary research on the use of arbitration clauses in connection with consumer financial products and services. The CFPB based its research on credit card, checking account, payday loan and prepaid card filings with the American Arbitration Association from 2010-2012. As expected, the research demonstrated widespread use of arbitration clauses by large financial institutions, with most arbitration clauses expressly baring consumers from filing class arbitration, among other things. The results suggest that the CFPB is likely to crack down on arbitration clauses in the future.
In the study, the CFPB found that only 900 arbitration filings were made during the years investigated, while more than 3,000 cases were filed by consumers in federal court concerning credit card issues alone. More than 400 cases were filed as class actions, but the CFPB found that only two class filings were made in arbitration. As previously reported, the CFPB launched its public inquiry on arbitration clauses in April 2012. The second phase of the CFPB’s study includes issues such as whether consumers are aware of arbitration clause terms and whether arbitration clauses influence consumers’ decisions about which consumer products to purchase. The CFPB held its first field hearing on the subject matter in Dallas on December 12. The hearing featured testimony from consumer groups, industry representatives and members of the public.