Readers of this blog may be interested in knowing a little bit more about what the Consumer Financial Protection Bureau is asking for in its request for information, which Allison Zieve mentioned in a post earlier today. To put it in a nutshell, the CFPB is not now asking what it should do about arbitration, nor is it yet asking people to provide it with facts or opinions about arbitration. Rather, it is just asking people to tell it what it should ask about arbitration, and where it should look for answers to those questions.
The Dodd-Frank Act gave the CFPB some regulatory authority with respect to the use of arbitration agreements in consumer financial transactions, but first required the agency to conduct a study of the use of arbitration agreements in consumer transactions, and to report the results to Congress. The agency is now asking for comment on what specific issues about arbitration it should study, and how it should go about studying them.
For example, just on the subject of how often arbitration agreements are used, the CFPB wants to know where to turn for information. Credit card agreements are subject to regulatory filing requirements, so it is relatively easy for the agency to determine how often they contain arbitration clauses. But with respect to other types of agreements, it's not obvious how to get a comprehensive view of how often they require arbitration. CFPB is looking for ideas.
The CFPB also wants to know whether people think it should study a variety of subtopics, including the following:
- How often do arbitration agreements contain particular types of provisions?
- How often do consumers initiate arbitrations? How often do they do so voluntarily, as opposed to being compelled to do so?
- What types of cases are commonly brought in arbitration? What are the outcomes? Are consumers satisfied with them?
- How often to companies initiate arbitration against consumers, in what types of cases, and with what results?
- And the $40,000 question: What effects have arbitration agreements, and such features as class action bans, had on consumers? Do they harm consumers by inhibiting the enforcement of laws regulating consumer finance or benefit them by lowering prices for consumer services?
Again, the CFPB doesn't want to know the answers to any of these questions yet. It just wants to know whether it should ask them, and, if so, how to go about looking for the answers.
If you have any thoughts, the agency wants them by June 23, 2012!