Originally from Alternatives to the High Cost of Litigation

PAGE PREVIEW

The Albuquerque, N.M., public forum that introduced the consumer financial services industry to new restrictions on how it may use arbitration last month delivered the blow many practitioners either feared or welcomed.

And it was precisely what attorneys on both sides predicted. The Consumer Financial Protection Bureau followed through on what it announced last fall it expected to do.

So there were no surprises when the agency, created by the 2010 Dodd- Frank Wall Street Reform and Consumer Protection Act, announced it would be opening a comment period on its proposed regulation that would end the use of class waivers which require consumers to go to arbitration, individually, to address disputes under their contracts. When present in contracts, the waivers mean that consumers may not join together as plaintiffs in class action litigation or mass arbitrations to address their complaints, even when the problems involve claims that are of low value, such as interest overcharges and penalties.