Section 1028 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Act") authorizes the Bureau of Consumer Financial Protection ("Bureau") to ban or restrict mandatory arbitration and directs the Bureau to conduct a study and report to Congress. The Act does not fix a time within which the study must be conducted and there is no indication that any study has been commenced.

Until a study can be completed and submitted to Congress, the Bureau does not have the authority to ban or restrict arbitration agreements. At such time as a study has been completed, the Bureau may prohibit or impose conditions on arbitration only if it "finds that such a prohibition or imposition of conditions or limitations is in the public interest and for the protection of consumers." The Bureau's findings must be consistent with its study.

Because of the scope of the Bureau's responsibilities and the absence of a Congressional approved director of the Bureau, it is unlikely that any study will be initiated soon. Once the study has been completed and submitted to Congress, any regulation adopted by the Bureau will not be effective until 180 days after the effective date of the regulation.

In anticipation of arbitration being prohibited, some banks have eliminated arbitration provisions in their consumer documents. If arbitration is desirable, such action is premature. It could be as long as two years before the Bureau regulates arbitration. By then, Congress may have repealed all or part of the Act.