The CFPB announced that it is holding a field hearing on May 5, 2016, in Albuquerque, New Mexico, on arbitration. Previously, CFPB field hearings have resulted in the announcement of proposed rules. We anticipate that this field hearing could result in the release of the CFPB’s proposed rule on arbitration provisions in some consumer financial services agreements.
In October 2015, the CFPB convened a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel to review the arbitration proposal. The CFPB’s proposals provided to the SBREFA panel explained that the CFPB is seeking to ban class action waivers in consumer financial services agreements.
In March 2015, the CFPB published the results of its study of consumer financial services arbitration provisions. Industry response rebutted the study’s results in order to illustrate that arbitration provisions have been effectively used by consumers and financial services companies as a way to resolve disputes.
We will be closely monitoring this issue and will provide our summary of the field hearing and the impact on financial services companies.