CFPB's Cordray Reiterates Intent to Pursue Rulemaking on Consumer Arbitration Clause
Sharon Edmondson, Washington Legislative Team Member | August 07, 2015
At a hearing before the Senate Committee on Banking, Housing & Urban Affairs in July, Director Cordray affirmed the bureau’s intention to proceed with rulemaking governing arbitration clauses in consumer financial products.
At the hearing, Cordray indicated the CFPB would proceed “in due course” to convene a small business review panel, which is the first step in the rulemaking process.
Before Cordray’s testimony, several banking industry groups sent to the CFPB a letter urging that the arbitration study supports a conclusion that pre-dispute arbitration clauses benefit consumers. Eighty-five members of Congress are also on record criticizing the aribration study and urging the CFPB to reopen the study process, seek public comment, and provide necessary cost-benefit analysis before engaging in any rulemaking. The CFPB has not announced a timetable for initiation of rulemaking activities but the process should be a contentious one.