According to a Politico report, the House Appropriations Committee has approved an amendment to the FY 2016 Financial Services Appropriations bill that would impose new requirements on the CFPB before it can issue a rule governing arbitration agreements. The amendment, which was introduced by Republican Representatives Steve Womack and Tom Graves, reportedly would require the CFPB to produce a peer-reviewed study on arbitration and determine that the benefits of a new rule outweigh the costs before issuing an arbitration regulation.
In March 2015, the CFPB delivered to Congress the final results of its empirical study of consumer arbitration as mandated by Section 1028 of the Dodd-Frank Act. Among the study’s deficiencies we have noted is its failure to examine the actual experiences of consumers who have gone through arbitration or compare how class members fared individually in class actions resulting in monetary relief to how the consumer would have fared in an individual arbitration. Last month, five leading financial services industry trade groups sent a letter to the CFPB urging it to solicit public comments on the final results of its arbitration study before deciding whether to initiate a rulemaking proceeding pursuant to Section 1028(b) of the Dodd-Frank Act.