Attempts to regulate private arbitration in consumer financial products: the consumer financial protection bureau approach

Author:José Pérez Alicea
Position:Juris Doctor Candidate, 2019 at University of Puerto Rico School of Law
Pages:166-177
 
FREE EXCERPT
ATTEMP TS TO REGULATE PRIVATE ARBITRATION IN
CONSUMER FINANCIAL PRODUCTS: THE CONSUMER
FINANCIAL PROTECTION BUREAU APPROACH
JOSÉ PÉREZ ALICEA*
Introduction ....................................................................................................................... 166!
I.!The CFPB and Rule 1041 ........................................................................................ 167!
II.!The CFPB Study ....................................................................................................... 168!
A.!Arbitration Clause Incidence and Features ................................................... 169!
B.!Consumer Und erstanding and Awareness .................................................... 169!
C.!Arbitration Incidence and Outcomes.............................................................. 170!
D.!Class Litiga tion Incid ence and Outcomes ..................................................... 170!
E.!Individual Litig ation Incidence and Outcomes ............................................ 170!
F.!Small Claims Court ............................................................................................. 170!
G.!Class Settl ements ................................................................................................. 171!
H.!Public and Private Enforcement ........................................................................ 171!
I.!Price and Output Effects of Arbitration Provisions ...................................... 171!
III.!Applicable Legal Standard ................................................................................. 171!
IV.!Executive Reports Against Rule 4001 ............................................................. 172!
V.!Previous Administrative Arbitration Rules......................................................... 173!
A.!Federal Trade Commission ................................................................................ 173!
B.!Financial Industry Regulatory Authority ...................................................... 174!
C.!Commodity F utures Trading Commission .....................................................175!
D.!Department of Labor .......................................................................................... 176!
Conclusion.......................................................................................................................... 176!
INTRODUCTION
The purpose of the present essay is to analyse recent devel opments
concerning the Consumer Financial Protection Bureau’s (CFPB) attempts to
regulate private arbitration in consumer financial products. Meanwhile,
contrasting them to other recent and parallel administrative endeavors aimed at
curving, what some deem, an overextended and abusive system. Particularly, this
* Juris Doctor Candidate, 2019 at University of Puerto Rico School of Law; B.B.A. in Finance and
Economics, 2015 at University of Puerto Rico School, Río Piedras, School of Business
Administratio n. This paper is the product of a course on Comme rcial Arbitration ta ught by
Professor Antonio Ga rcia Padilla. The author would like to thank Professo r Garcia Padilla for his
comments and guidance over the course of writing this article.

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