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By Jeff Bater
April 29 — The Consumer Financial Protection Bureau (CFPB) has scheduled a May 5 field hearing in Albuquerque, N.M. on arbitration.
Experts have said they think the hearing will coincide with the release of a proposed rule on the use of arbitration agreements in certain consumer financial services contracts (78 BBD, 4/22/16).
The CFPB announced last October it is considering rules that would ban banks and other financial companies from using “free pass” arbitration clauses to block consumers from suing in groups to obtain relief.
The hearing will feature remarks from agency Director Richard Cordray and testimony from consumer groups, industry representatives and members of the public. A live video will be streamed on the CFPB's blog, the agency said.
At issue are millions of consumer financial services contracts - many involving credit cards - that include provisions calling for disputes to be resolved in binding arbitration.
Arbitration clauses have been a battleground for years. Consumer groups say borrowers are, in essence, forced to give up important legal remedies, and often must fight financial services companies on an individual basis.
Banks claim arbitration is a cheaper and better way to resolve disputes in many cases, but also say it provides relief from class suits and the sizeable awards they make possible.
John C. Williams, the president of the Federal Reserve's San Francisco district bank, is slated to speak May 2 at a Milken Institute conference in Beverly Hills.
Williams will be one of several speakers on a panel offering views during a conference event titled Systemic Risk: Inevitable or Preventable? The experts will consider questions such as whether systemic risks can truly be reduced or eliminated — or merely shifted, thereby masking underlying problems.
Among other points, the conference comes against the backdrop of a recent court ruling that rescinded the Financial Stability Oversight Council's designation of MetLifeInc. as a systemic risk.
The Treasury Department has pledged to appeal that decision.
To contact the reporter on this story: Jeff Bater in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Ferullo in Washington at email@example.com
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