CFPB Monitor - FTC files amicus challenging arbitration
provision
Last year, the DOJ filed an
amicus brief in the U.S. Supreme Court in American
Express Co. v. Italian Colors Restaurant in support of the
merchants who were challenging the class action waiver in American Expressâ
arbitration agreement. (The Supreme Court ruled against the merchants in
a 5-3 decision.)
FTC files amicus challenging arbitration provision
By Alan S. Kaplinsky on
As industry and consumers await the results of the CFPBâs arbitration study, the FTC became the latest federal agency to weigh in on consumer arbitration issues. Recently, at the invitation of the Seventh Circuit, the FTC filed an amicus brief supporting a class action lawsuit brought by consumers challenging a tribal payday lenderâs practice of requiring them to submit to arbitration at a Native American reservation. The FTC argued that the lenderâs arbitration provision should be invalidated as unfair and unconscionable for reasons that included the expense involved in traveling to the reservation to participate in arbitration or, if the consumer opted out, a proceeding in tribal court.
Last year, the DOJ filed an amicus brief in the U.S. Supreme Court in American Express Co. v. Italian Colors Restaurant in support of the merchants who were challenging the class action waiver in American Expressâ arbitration agreement. (The Supreme Court ruled against the merchants in a 5-3 decision.)
It will be interesting to see if federal agencies continue to address consumer arbitration issues given the lack of success the plaintiffsâ bar has had in challenging arbitration provisions during the past few years.