The Federal Trade Commission recently released its preliminary report on two studies it conducted to help understand the effectiveness of class action settlement notices and to “develop information to help improve settlement outcomes for consumers.” The report shows that claims rates, regardless of the form of notice, are very low and that some of the more costly forms of notice, like publications in magazines and national newspapers, do not significantly increase the claims rate. … Continue Reading
class action
Employment Discrimination Class Action Filed Against CFPB
The CFPB and its Acting Director are facing a proposed class action lawsuit alleging discrimination against minority and female workers based on allegations of lesser pay and fewer promotions than their white male counterparts. The case is captioned at, Jones et al v. Mulvaney, U.S. District Court, District of Columbia, No.… Continue Reading
Dept. of Education proposal allows use of pre-dispute arbitration agreements by schools receiving Title IV aid for student borrowers
The Department of Education has issued a proposal that would rescind the “Borrower Defense” final rule issued by the ED in November 2016 and replace it with the “Institutional Accountability regulations” contained in the proposal. Among the major changes to the final rule that would be made by the proposal is the removal of the final rule’s ban on the use of pre-dispute arbitration agreements and class action waivers for borrower defense claims by schools receiving Title IV assistance under the Higher Education Act (HEA). … Continue Reading
FTC proposes using Internet panel for class action notice study
As part of its “Class Action Fairness Project,” the FTC is seeking comment on its plans to use an Internet panel to conduct research on class action notices. According to the FTC’s Federal Register notice, the project “strives to protect injured consumers from settlements that provide them with little to no benefit and to protect businesses from the incentives such settlements may create for the filing of frivolous lawsuits.” … Continue Reading
Fate of House bill to change class action procedures could be barometer for CFPB arbitration rule
On February 9, 2017, the House Judiciary Committee by a vote of 19-12 passed the Fairness in Class Action Litigation Act of 2017, a bill that would make significant changes to the procedures for class actions in federal court. The bill’s passage by the House and Senate with strong Republican support would seem to augur well for the adoption of a joint resolution of disapproval under the Congressional Review Act to nullify a final arbitration rule should one be issued by the CFPB.… Continue Reading
FTC seeks information on class action claims rates
The FTC has announced that to study the effectiveness of various class action settlement notice programs, it has issued orders to eight claims administrators requiring them to provide information on their procedures for notifying class members about settlements and the response rates for various methods of notification.
It is anticipated that such information will demonstrate that only a very small fraction of class members who must file claims to participate in a settlement fund actually do so. … Continue Reading
CFPB Proposes Ban on Class Action Waivers
Today, the CFPB announced at a field hearing in Denver, Colorado that it is considering proposing rules that would prohibit consumer financial services companies from using class action waivers in consumer arbitration clauses. The CFPB has published an outline of its proposals in preparation for convening a Small Business Review Panel to gather feedback from small industry stakeholders. … Continue Reading
CFPB arbitration study to be completed this year
We have previously blogged about the ongoing arbitration study which the CFPB is conducting under Section 1028 of Dodd-Frank.
Yesterday, Will Wade-Gery (who is managing the study for the CFPB) spoke at the 19th Annual Consumer Financial Services Institute (which I co-chair) in Chicago. Mr Wade-Gery provided an update regarding the status of the study.… Continue Reading
Preliminary arbitration study results: is the Bureau keeping an open mind?
Following up on our earlier post, we have now had a chance to review the CFPB’s 168-page report containing some preliminary results of its consumer arbitration study. Our responses to some of the Bureau’s specific findings can be accessed here. While we are encouraged that the Bureau recognizes the importance of studying the relative benefits to consumers of individual arbitration when compared with class action litigation, we are concerned that the Bureau has already made up its mind on the need for subsequent rulemaking. … Continue Reading