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Author: Michael S. Barr Publisher: ISBN: Category : Languages : en Pages : 25
Book Description
Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts -- for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute. The lack of salience means that there is no meaningful competition over arbitration provisions or likely any price effect. Some arbitration proceedings lack procedural protections, and unbiased arbitrator selection essential for fair outcomes. In addition, many arbitration provisions contain “gag” rules barring disclosure of reasoning, evidence, or outcomes. Moreover, arbitration clauses typically preclude consumers from banding together in aggregated actions, which diminishes redress and weakens deterrence. In the wake of the financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which authorizes the new Consumer Financial Protection Bureau and the U.S. Securities and Exchange Commission to prohibit or condition the use of arbitration clauses in consumer finance and investment contracts, respectively. It is well past time for these agencies to use this authority.
Author: Michael S. Barr Publisher: ISBN: Category : Languages : en Pages : 25
Book Description
Mandatory pre-dispute arbitration clauses are pervasive in consumer financial and investor contracts -- for credit cards, bank accounts, auto loans, broker-dealer services, and many others. These clauses often ill serve households. Consumers are typically presented with contracts on a “take it or leave it” basis, with no ability to negotiate over terms. Arbitration provisions are often not clearly disclosed, and in any event are not salient for consumers, who do not focus on the importance of the provision in the event that a dispute over the contract later arises, and who may misforecast the likelihood of being in such a dispute. The lack of salience means that there is no meaningful competition over arbitration provisions or likely any price effect. Some arbitration proceedings lack procedural protections, and unbiased arbitrator selection essential for fair outcomes. In addition, many arbitration provisions contain “gag” rules barring disclosure of reasoning, evidence, or outcomes. Moreover, arbitration clauses typically preclude consumers from banding together in aggregated actions, which diminishes redress and weakens deterrence. In the wake of the financial crisis, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which authorizes the new Consumer Financial Protection Bureau and the U.S. Securities and Exchange Commission to prohibit or condition the use of arbitration clauses in consumer finance and investment contracts, respectively. It is well past time for these agencies to use this authority.
Author: George Friedman Publisher: ISBN: Category : Languages : en Pages : 6
Book Description
The Dodd-Frank Wall Street Reform and Consumer Protection Act addressed fundamental consumer protection issues involving securities, banking, and indeed the US economy. The act, known as Dodd-Frank, also contains language governing the use of predispute arbitration agreements (PDAAs) in consumer financial and investor contracts. Dodd-Frank created the Consumer Financial Protection Bureau (CFPB) and charged the new bureau with studying the use of PDAAs in consumer financial transactions and addressing PDAAs “if the Bureau finds that such a prohibition or imposition of conditions or limitations is in the public interest and for the protection of consumers...” This article examines the CFPB's mission under Dodd-Frank as it relates to mandatory use of PDAAs in consumer financial contracts. Often called “mandatory arbitration” and more recently “forced arbitration,” the subject is perhaps more nuanced than the reader may realize. The article covers what CFPB must do under Dodd-Frank, what it may do if it so chooses, and what the author thinks the CFPB should do. Predicting what CFPB will do and whether it will succeed will not be easy. As that great philosopher Yogi Berra said, “It's tough to make predictions, especially about the future.”
Author: Louis F. Del Duca Publisher: ISBN: Category : Languages : en Pages : 22
Book Description
Judicial precedent with regards to mandatory pre-dispute arbitration agreements has given such clauses substantial protection, resulting in their widespread inclusion in boilerplate contract language. However, recent findings and assertions from the Consumer Financial Protection Bureau (CFPB) may cause a serious disruption in the use of such clauses in business to consumer (B to C) contracts. Recent CFPB studies and comments suggest that the CFPB is poised to exercise its authorization under the Dodd-Frank Act to restrict the use of pre-dispute mandatory arbitration agreements in consumer contracts.
Author: The Law The Law Library Publisher: Createspace Independent Publishing Platform ISBN: 9781720961802 Category : Languages : en Pages : 454
Book Description
Arbitration Agreements (US Consumer Financial Protection Bureau Regulation) (CFPB) (2018 Edition) The Law Library presents the complete text of the Arbitration Agreements (US Consumer Financial Protection Bureau Regulation) (CFPB) (2018 Edition). Updated as of May 29, 2018 Pursuant to section 1028(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau of Consumer Financial Protection (Bureau) is issuing this final rule to regulate arbitration agreements in contracts for specified consumer financial product and services. First, the final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule requires covered providers that are involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The Bureau is also adopting official interpretations to the regulation. This book contains: - The complete text of the Arbitration Agreements (US Consumer Financial Protection Bureau Regulation) (CFPB) (2018 Edition) - A table of contents with the page number of each section
Author: Martha T. McCluskey Publisher: ISBN: Category : Languages : en Pages : 39
Book Description
Forced arbitration clauses have become almost unavoidable in contracts for financial services and products ranging form credit cards to private student loans. This report examines how the financial services industry uses these clauses to defeat consumers' rights and evade accountability for their wrongdoing.As the report explains, the forced arbitration process harms consumers by relegating them from the civil justice system to an inferior forum for vindicating their rights. In contrast to the courts, forced arbitration tends to be secretive, less independent of industry, more prone to erroneous and arbitrary rulings, more likely to discourage the pursuit of claims with procedural barriers, and more likely to provide inadequate relief for compensating victims of corporate wrongdoing.The report examines the 2016 proposal by the Consumer Financial Protection Bureau (CFPB) to limit the use of forced arbitration clauses in contracts for financial services and products, and finds that the proposal is consistent with the agency's statutory obligation to protect consumers. The report goes on to explain that the CFPB would better fulfill its statutory mandate by revising its proposal to include stronger protections for consumers.
Author: Peter B. Rutledge Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
This Article contributes to an ongoing debate, afoot in academic, legal, and policy circles, over the future of consumer arbitration. Utilizing a newly-available database of credit card agreements, the article offers an in-depth examination of dispute resolution practices within the credit card industry. In some respects, the data cast doubt on the conventional wisdom about the pervasiveness of arbitration clauses in consumer contracts and the presence of unfair terms. For example, the vast majority of credit card issuers do not utilize arbitration clauses, and by the end of 2010, the majority of credit card debt was not subject to such an agreement. Likewise, while the use of class waivers is widespread in arbitration clauses, most clauses lack the sort of unfair procedural terms for which arbitration is often criticized. The upshot of these and other findings is that consumers, in some respects, have more choice in their contracts than the literature suggests. Our work also responds to the suggestions of some scholars that businesses favor arbitration clauses in their consumer contracts but not their business-to-business agreements. On the contrary, our research suggests that the difference may not be as dramatic as previous research suggests. These results hold important implications for ongoing policy debates, including the proposed Arbitration Fairness Act pending in Congress as well as the work of the newly-minted and controversial Consumer Financial Protection Bureau (“CFPB”). Our findings suggest that the Arbitration Fairness Act may be based on faulty empirical premises and that the blanket prohibition contained in the Act may be overbroad. Our findings also provide a model that the CFPB might follow in conducting its statutorily-required study of the use of arbitration clauses in consumer financial services contracts.
Author: Robin Hui Huang Publisher: Cambridge University Press ISBN: 1107164990 Category : Business & Economics Languages : en Pages : 553
Book Description
This book assembles the world's most authoritative specialists for a comparative analysis of the enforcement of corporate and securities laws in thirteen national jurisdictions. It examines the enforcement of corporate and securities laws across the globe and across different legal and political systems from an in-depth comparative perspective.
Author: Robin Hui Huang Publisher: Cambridge University Press ISBN: 1316738507 Category : Law Languages : en Pages : 553
Book Description
This book assembles the world's most authoritative specialists for a comparative analysis of the enforcement of corporate and securities laws in thirteen national jurisdictions. It examines the enforcement of corporate and securities laws across the globe and across different legal and political systems from an in-depth comparative perspective.
Author: Richard Cordray Publisher: Oxford University Press ISBN: 0197503012 Category : Political Science Languages : en Pages : 305
Book Description
Every day across America, consumers face issues with credit cards, mortgages, car loans, and student loans. When they are cheated or mistreated, all too often they hit a brick wall against the financial companies. People are fed up with being run over by big corporations, and few have the resources or expertise to fight back on their own. It is no wonder consumers feel powerless: they are outgunned every step of the way. Since 1970, the financial industry has doubled in size. It is the biggest source of campaign contributions to federal candidates and parties, spending about $1 billion annually on campaigns and another $500 million on lobbying. The four biggest banks each now has more than $1 trillion in assets. Financial products have become a mass of fine print that consumers can hardly even read, let alone understand. Growing problems in the increasingly one-sided finance markets blew up the economy in 2008. In the aftermath, Congress created the Consumer Financial Protection Bureau. Sharing the stories of individual consumers, Watchdog shows how the Bureau quickly became a powerful force for good, suing big banks for cheating or deceiving consumers, putting limits on predatory lenders, simplifying mortgage paperwork, and stepping in to help solve problems raised by individual consumers. It tells a hopeful story of how our system can be reformed by putting government back on the side of the people, to strengthen our families, safeguard the marketplace, and establish a new baseline of fairness in our democratic society.
Author: Michael S. Barr
Author: Michael S. Barr
Author: George Friedman
Author: Louis F. Del Duca
Author: Julie Kline
Author: The Law The Law Library
Author: Martha T. McCluskey
Author: Peter B. Rutledge
Author: Robin Hui Huang
Author: Robin Hui Huang
Author: Richard Cordray