March 25, 2015 Articles

Fascinating Highlights of the CFPB Arbitration Study

By Liz Kramer

In my recent news and development article, I shared some of the highlights from the first half of the new CFPB Arbitration Study. This article covers the second half of the report, with juicy information gleaned from the Consumer Financial Protection Bureau's (CFPB) analysis of almost 2,000 actual consumer arbitrations and its comparison of those results to actual consumer court actions.

Arbitration Outcomes
The American Arbitration Association (AAA) gave the CFPB access to information from about 1850 total disputes filed with it in 2010, 2011, and 2012 relating to credit cards, checking accounts, payday loans, (GPR) prepaid cards, student loans, and auto loans. The average claim made by a consumer was $27,000, and the average claim made by the financial institution was $16,011 (debt collection). The bulk of the claims related to credit cards, with auto loans and students loans following at a distant second and third. Arbitration was usually completed within 5–8 months. Of the disputes resolved by arbitrators, 74 percent were resolved by an arbitrator who also was appointed on at least one other consumer arbitration in the sample set.

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