Consumer Finance Protection Bureau issues report on mandatory arbitration and class action waivers

Posted on: March 11th, 2015 by N. Robert Stoll
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CFPB arbitration reportYesterday, following three years of intense research, empirical studies, and analysis, following dozens of submissions by a wide range of stakeholders including thousands of pages, the Consumer Finance Protection Bureau issued its Final Report, mandated by Congress in the Dodd-Frank Act, as to the effects of mandatory arbitration/class action waivers. From the CFPB press release:

“[A]rbitration agreements restrict consumers’ relief for disputes with financial service providers by limiting class actions. The report found that, in the consumer finance markets studied, very few consumers individually seek relief through arbitration or the federal courts, while millions of consumers are eligible for relief each year through class action settlements. The Bureau’s report also found that more than 75 percent of consumers surveyed did not know whether they were subject to an arbitration clause in their agreements with their financial service providers, and fewer than 7 percent of those covered by arbitration clauses realized that the clauses restricted their ability to sue in court.”

A fact sheet on the report can be found here and the complete report is available here.