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U.S. Consumer Bureau Starts Examination of Mandatory Arbitration
The U.S. Consumer Financial Protection Bureau is seeking comment on the use of clauses that require consumers to resolve disputes with companies through arbitration rather than through the court system.
“We want to learn how arbitration clauses affect consumers, and how effective arbitration is in resolving consumers’ issues,” CFPB Director Richard Cordray said today in an e-mail statement announcing the request. “This inquiry will help the Bureau assess whether rules are needed.” Comments are due to the agency by June 23.
Mandatory arbitration clauses are used for products including credit cards, checking accounts and payday loans.
The bureau didn’t say when it would complete its study, which is required under the Dodd-Frank Act. Under the 2010 law, the consumer bureau can ban or condition the use of mandatory arbitration in financial-services contracts, consistent with the results of the study.
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