Just a few months after its first Director took office in January of 2012, the Consumer Financial Protection Bureau is embarking on a study of arbitration. The CFPB announced on April 24 that it invites the public to send information about “how consumers and financial services companies are affected by arbitration and arbitration clauses,” so that it can eventually determine whether to flex its rule-making muscle.
This request for information does not signal any particular bias of the new Director, Richard Cordray. Instead, it shows the new agency is fulfilling its mandate under the Dodd-Frank Act to study the use of pre-dispute arbitration agreements in the consumer financial arena.
The agency, however, is starting its study with the speed of a tortoise and in the style of a professor wearing tortoise shell glasses. Instead of diving right in, the CFPB is holding off its real study while it decides how to choose the questions. For example, it is seeking information about 1) how to assess how prevalent pre-dispute arbitration agreements are in consumer financial agreements; 2) what data it should seek from what sources; and 3) whether it should find out whether consumers who arbitrated disputes against financial services companies were satisfied with the process. (Let me publicly answer that last question: Yes! Of course! Please ask both consumers and companies whether they were satisfied with the process.)
While I am excited about the prospect of this new agency investigating and publicizing important data about consumer arbitrations that is currently inaccessible, the CFPB’s current list of questions makes me wonder whether it is up to the task.