Joint Trades Comments on Opposing Terms and Conditions Database

Our groups oppose the recent proposal by the Consumer Financial Protection Bureau to create a public registry of companies that use certain terms and conditions—including, most significantly, arbitration agreements—in their contracts with consumers. The core of this Proposed Rule is a wholly impermissible and unjustified attack on arbitration agreements that violates the Dodd-Frank Act and the Congressional Review Act (CRA), as well as the protections for arbitration agreements that Congress put in place when it enacted the Federal Arbitration Act (FAA).

In reliance on the FAA’s protections, companies, including in the context of financial products or services, have for many years resolved consumer disputes by arbitration rather than by costly and burdensome litigation in our overcrowded court system. These arbitration provisions reduce transaction costs and enable fair, speedy, and efficient dispute resolution, thereby providing significant advantages to consumers, businesses, and the public at large. Yet the Proposed Rule would brand companies as “risky” to consumers merely for exercising their federally protected right to use arbitration, or otherwise engaging in fully lawful and appropriate conduct—making those companies a special focus of the Bureau’s supervisory and enforcement activities just because they use arbitration to resolve consumer disputes. The Bureau’s proposal offers no basis for that conclusion, and there is none