The CFPB's March study of mandatory pre-dispute arbitration agreements shows that arbitration has "significant, demonstrable benefits over litigation in general and class action litigation in particular," ABA and two other trade groups said in a comment letter. In keeping with those findings, the groups said, the Dodd-Frank Act would not permit rulemaking prohibiting such agreements.
The groups added that if the bureau were to over-regulate arbitration agreements, companies would be likely to discontinue their use, thus depriving consumers of a "valuable and time-tested procedure for economically, expeditiously, conveniently, and efficiently resolving individual customer disputes."
The groups also urged the CFPB to conduct additional research before proposing any regulation, including research about customer satisfaction with arbitration and “whether the creation of the bureau and its own regulatory, enforcement and supervisory activities are supplanting what consumer activists contend are the main justification for class actions.”
Read the letter.