CFPB schedules field hearing to discuss arbitration
The Consumer Financial Protection Bureau’s strategy to regulate how arbitration can occur might become clearer since the agency now has scheduled a field hearing specifically about the topic.
On Wednesday, the CFPB announced plans for a field hearing about arbitration; one of nine priority goals spelled out by the bureau’s chief of staff earlier this year. The hearing — which will feature remarks from CFPB director Richard Cordray as well as testimony from consumer groups, industry representatives and members of the public — is set for May 5 in Albuquerque, N.M.
Changing how arbitration can unfold has been on the CFPB’s radar for some time.
Last October, the bureau used the phrase “free pass” to describe how some finance companies include arbitration clauses in their vehicle installment contracts. The wording came when the CFPB announced it is considering proposing rules that would ban consumer financial companies from using a “free pass” to block consumers from suing in groups to obtain relief.
At various times, Cordray discussed his sentiment about arbitration. Once instance came earlier this year when he spoke during an event hosted by the American Constitution Society. Cordray declared “arbitration clauses, as they are used today both in the field of consumer finance and more generally, often have been deliberately designed to block Americans from effective means of vindicating their rights.”
And in his opening testimony when appearing at hearings conducted in both chambers on Capitol Hill, Cordray reiterated the general mandate of the CFPB, which could include in how it oversee arbitration.
“In addition to implementing the Dodd-Frank Act, the bureau continues to explore other areas where regulations may be needed to ensure that markets function properly and possibly harmful or inefficient practices are addressed,” Cordray said.
“Over the next six months, the bureau will continue implementing the Dodd-Frank Act and using its regulatory authority to ensure that consumers have access to consumer financial markets that are fair, transparent, and competitive,” he went on to say.