Based on the most recent Supreme Court cases, the court has largely upheld the use of arbitration in contracts. Bankers also argue the CFPB has authority to take enforcement actions if it sees individual companies abusing arbitration clauses.
"This is about class actions. And in the past, the argument for a class action was to fill in a gap in compliance enforcement but the bureau fills in that gap now," said Nessa Feddis, the American Bankers Association's vice president and deputy chief counsel for consumer protection and payments. "The bureau has not been shy about bringing on enforcement actions."
Richard Hunt, chief executive of the Consumer Bankers Association, said in an emailed statement that he was "disappointed" in the "piecemeal release of data in connection with the arbitration study [that] does not show the whole picture."
"For nearly 90 years, arbitration has been an important right which allows consumers to quickly and easily resolve disputes in a manner that is affordable for the consumer. We all know the winners in lawsuits are usually the attorneys, not consumers," he said. "Moving forward, I hope the CFPB, who has the sole authority on this important issue, will focus on how consumers fare in arbitration versus a suit in court or as a party to a class action."
Cordray said during the hearing that the bureau would be surveying consumers on their understanding of arbitration specifically in the credit card marketplace, in addition to its overall study of class actions versus arbitration.
For their part, industry representatives said they hope the CFPB does study the issue further.
"We're recommending that the bureau staff compare the real consumer benefits and outcomes among the various legal options" before taking further action, Feddis said. "They said they were going to be data driven, so we take them at their word."