Arbitration

Subscribe to Arbitration

On September 13, 2022, Public Justice and other consumer advocacy groups sent a letter to CFPB Director Rohit Chopra urging the CFPB to limit the use of “forced” arbitration provisions by banks and other consumer finance companies.  According to reports appearing in Law360 and BNA, at a virtual event organized by Public Justice and held the day after the letter was sent, Director Chopra expressed concerns about such provisions and is trying to “figure out what the path forward is.”… Continue Reading

We recently wrote about a Law 360 report indicating that the CFPB appears unlikely, at least in the near future, to undertake new rulemaking that would regulate the use of consumer arbitration agreements.  The report was based on comments made by CFPB Director Rohit Chopra at a virtual meeting organized by Public Justice. … Continue Reading

According to a report appearing in today’s Law360, CFPB Director Rohit Chopra has indicated that the agency appears unlikely, at least in the near future, to undertake new rulemaking that would regulate the use of consumer arbitration agreements.  The CFPB’s previous rule—which would have forbidden companies from including class action waivers in consumer arbitration agreements—was overridden by Congress in 2017 under the Congressional Review Act. … Continue Reading

Recently, a divided panel of the U.S. Court of Appeals for the Third Circuit held in Zirpoli v. Midland Funding, LLC that an arbitrator, not the district court, must decide whether class action claims brought against Midland Funding LLC are subject to arbitration.  The question in Zirpoli was whether a challenge to the legality of an assignment of a loan that is subject to an arbitration agreement challenges the formation of the arbitration agreement itself. … Continue Reading

The U.S. Department of Education recently announced proposed regulations designed to expand and improve the major student loan discharge programs authorized by the Higher Education Act.  Among other things, the proposed regulations would prohibit institutions that participate in the Federal Direct Loan program from requiring borrowers to sign mandatory pre-dispute arbitration agreements or class-action waivers. … Continue Reading

The U.S. Supreme Court has once again confirmed that the Federal Arbitration Act (FAA) preempts incompatible state laws that preclude contracting parties from controlling which claims are subject to arbitration.  Ruling in favor of the employer in Viking River Cruises, Inc. v. Moriana, the Court held that the California courts erred in refusing to compel arbitration of an employee’s individual claim under the State’s Private Attorneys General Act (PAGA).… Continue Reading

As many of our blog readers know, Alan Kaplinsky and Professor Jeff Sovern have regularly engaged in legal debate about consumer finance issues via blog posts.  Alan’s views can be found in blog posts published on this blog, Consumer Finance Monitor, while Professor Sovern’s views appear in blog posts published on his Consumer Law & Policy Blog.… Continue Reading

For the second time in two weeks, the U.S. Supreme Court has ruled against a company seeking to compel individual arbitration of Fair Labor Standards Act (FLSA) collective action claims.  In Southwest Airlines Co. v. Saxon, the Court held that the plaintiff’s claims were exempt from arbitration under Section 1 of the Federal Arbitration Act (FAA), which exempts from the statute’s ambit “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” … Continue Reading

The U.S. Supreme Court today held that waiver of the right to arbitrate does not require a showing that the other party was prejudiced.  The unanimous opinion by Justice Kagan in Morgan v. Sundance reversed the Eighth Circuit, which had held that a party waives the right to arbitrate if it knew of the right, acted inconsistently with that right and prejudiced the other party by its inconsistent actions. … Continue Reading

Recently, Professor Jeff Sovern and I exchanged views on whether the CFPB could (or should) add arbitration rulemaking to its regulatory agenda.  Professor Sovern has now suggested that the CFPB’s 2015 Study of consumer arbitration would support a new regulation.  It would not.

The CFPB’s earlier final arbitration rule was overridden by the Congress under the Congressional Review Act (CRA). … Continue Reading