CFPB Goes Live With Inquiry Into Dispute Arbitration Clauses

The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) went live with an inquiry Tuesday that it said will help it determine whether to move on new rules for dispute arbitration clauses.

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As with many comment periods for new rules, the inquiry is open to the general public and financial services companies.

The CFPB said that it wanted to look for answers to questions about the prevalence of arbitration clauses in contracts for financial products, the kinds of claims consumers bring against financial services companies, and how arbitration clauses impact consumers.

The bureau referenced stipulations under the Dodd-Frank Act that obligate it to examine issues brought

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forward by pre-dispute arbitration clauses and the like.

The CFPB nodded at the issue of whether arbitration fast-tracks the dispute resolution process or gives consumers a bad hand by waiving the rights to trial.

""Arbitration clauses are found in many contracts for consumer financial products,"" CFPB Director Richard Cordray said in a statement. ""We want to learn how arbitration clauses affect consumers, and how effective arbitration is in resolving consumers' issues. This inquiry will help the Bureau assess whether rules are needed to protect consumers.""

The comment period will last until June this summer.

The inquiry into dispute arbitration clauses marks the latest move by the CFPB as it rolls out the authority granted it by Cordray's recess appointment in January.

The bureau more recently signaled that it plans to look into new rules for servicers that some say could amount to a formal set of national servicing standards.

In a recent interview with ""_DS News_"":http://www.dsnews.com/, our sister publication, Joseph Smith, newly appointed monitor of the $25 billion servicer settlement, said that ""ultimately... we'll have national standards ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô and we ought to.""

_[Editor's note: To view the full, exclusive interview with Joseph Smith, ""subscribe"":http://thefivestar.com/dssubscribe/template.php to_ DS News _and request the May issue of the magazine.]_