The U.S. Supreme Court decision in the Concepcion case may mean class action protection for financial institutions would be available in exchange for a beneficial arbitration program. CSi is tracking this issue as well as the recent announcement that the CFPB will be reviewing arbitration agreements.
CSi is closely monitoring reaction to the recent U.S. Supreme Court decision in AT&T Mobility LLC v.Concepcion, NO. 09-893 (April 27, 2011) ( www.supremecourt.gov/opinions/10pdf/09-893.pdf) regarding the inclusion of a mandatory arbitration/class action waiver provision in a standard consumer contract. In the past, CSi has received some inquiries regarding the insertion of arbitration language into our standard agreements but has not had any persistent interest on the part of CSi customers.
Concepcion was a close decision with important consequences for commercial and consumer arbitration programs. We note that in addition to this recent decision, the Dodd-Frank Wall Street Reform and Consumer Protection Act requires that the newly created Consumer Financial Protection Bureau study and report on the use of arbitration agreements connected to consumer financial services and may issue regulations if doing so is in the public’s interest and for the protection of consumers. We will be following the development of this issue closely over the coming months. If you would like to add your own language related to class action waiver and arbitration of claims, you may wish to consider using a free form field in the Truth in Savings (TIS) disclosure as this will be included by reference in the terms of your deposit agreement.