Earlier today, the Consumer Financial Protection Bureau released a preliminary report regarding its study of pre-dispute arbitration agreements in the consumer financial services and products industries. The Dodd-Frank Act instructed the Bureau to engage in this study. Click here for a copy of the preliminary report.
One key, preliminary finding that stands out to me is that almost all (90%) of the arbitration clauses studied include terms limiting class proceedings. The availability of class relief will likely be a critical issue in any policy decisions made by the Bureau.
The Bureau has authority under the Dodd-Frank Act to regulate the use of arbitration agreements in connection with consumer financial products or services. My personal opinion is that the Federal Arbitration Act is outdated (and the Supreme Court has expanded its meaning far beyond its original intent). I am not optimistic that Congress or the Supreme Court can fix the statute, and administrative agency action may present the best opportunity to regulate the use of arbitration.