Great news Monday. The Consumer Financial Protection Bureau can finally continue a crucial study on the effects of forced arbitration on consumers. Under the Dodd Frank Act, the CFPB has to complete a study as to whether the use of forced arbitration clauses by lenders is harmful to consumers. If the Bureau finds that forced arbitration is harmful, then it is required by the act to ban the use of forced arbitration by lenders.
We, among some others, had urged the Bureau to weigh the fact that very few consumers know anything about forced arbitration. While the clauses are justified under a bunch of rhetoric that consumers have supposedly agreed to them, in fact almost no consumers know about the rights they’ve supposedly waived. The Bureau decided it wanted to do a survey of consumers to find out what they do and don’t know about arbitration.
The Chamber of Commerce and corporate groups have vehemently argued that the Bureau should not consider whether consumers know anything about the rights that they use. So long as consumers formally have rights, banks argue, it doesn’t matter whether they know about their formal rights or not. I have been very critical of that position, arguing that of course it makes sense for the bureau to survey consumers. (We believe that the evidence overwhelmingly supports the Bureau banning arbitration in any case, but this is an additional reason.) Here’s something I wrote a while ago on this point: http://www.publicjustice.net/blog/cfpb-surveying-consumers-see-what-if-anything-they-know-about-arbitration
Anyhow, the consumer survey appeared to be slowing things down, because the Office of Management and Budget (picture the little trolls in Dilbert who work in accounting, slowing down everything and killing every good idea) was taking forever to approve this simple survey.
The roadblock has been lifted – the OMB has FINALLY gotten out of the way.
This blog originally appeared in Public Justice Righting Wrongs on September 10, 2014. Reprinted with Permission.
About the author: F. Paul Bland, Jr., Executive Director, has been a senior attorney at Public Justice since 1997. As Executive Director, Paul manages and leads a staff of nearly 30 attorneys and other staff, guiding the organization’s litigation docket and other advocacy.
As staff and senior attorney, he was responsible for developing, handling, and helping Public Justice’s cooperating attorneys litigate a diverse docket of public interest cases. Paul has argued and won more than 30 cases that led to reported decisions for consumers, employees or whistleblowers in six of the U.S. Courts of Appeals and the high courts of nine different states. Paul’s Twitter handle is @FPBland.
Paul has presented at more than 100 continuing legal education or professional conferences in more than 25 states; has testified in both houses of Congress, several state legislatures and administrative agencies; has been quoted in more than 100 periodicals throughout the country and has appeared in several radio and TV stories.