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The CFPB’s Unfair and Misleading Report on Arbitration

The Consumer Financial Protection Bureau (CFPB) issued a preliminary report on consumer arbitration late last year that appears to be another goalpost along the road leading to the end of alternative dispute resolution (ADR) as a primary method of resolving consumer disputes. The CFPB's failure to gather or report data reflecting the many sound reasons for continuing to use predispute arbitration provisions in consumer agreements indicates that we may soon hear the death knell for an approach that industry, Congress and the U.S. Supreme Court have supported for most of the past century.

This article addresses the CFPB's negative and lopsided presentation of consumer arbitration in its preliminary report, and outlines steps that companies can take to prepare for a world without arbitration provisions and class action waivers in anticipation of the Bureau continuing on its current course.