Now that the Consumer Financial Protection Bureau (CFPB) has announced its proposed rule to prohibit financial firms from using mandatory arbitration clauses in business contracts with consumers, Congress wants to see if this rule will actually help the public.
On Wednesday, May 18, at 2 p.m .EST, the House Financial Institutions and Consumer Credit Subcommittee will hold a hearing entitled “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?” The CFPB proposed a rule on May 5 to ban the use or arbitration clauses by businesses after months of discussion about the proposal. The Bureau is trying to keep businesses from requiring consumers to agree to arbitration clauses in financial contracts because the clauses deny consumers the opportunity to sue the businesses at a future date.
Eric Goldberg, Senior Counsel at CFPB, said that these clauses typically state that either the company or the consumer can require that disputes be resolved by privately appointed arbitrators, except for cases brought in small claims court.
“Where these clauses exist, either side can generally block lawsuits from proceeding in court,” Goldberg stated. “These clauses also typically bar consumers from bringing group claims through the arbitration process. As a result, no matter how many consumers are injured by the same conduct, consumers must proceed to resolve their claims individually against the company.”
Under Dodd-Frank, the CFBP is required to conduct a study of arbitration clauses and their use in conjunction with financial products, and then to regulate the use of arbitration clauses in a consistent manner with the report to Congress; the Subcommittee members will examine both the CFPB's report and the proposed rule.
Existing-home sales: Friday, May 20
The National Association of Realtors (NAR) will release the existing-home sales report for April 2016 on Friday morning, May 20. Last week, NAR Chief Economist Lawrence Yun predicted in his mid-year forecast that he believes existing-home sales will have their best year since before the crisis.
Yun has predicted an annual pace of 5.40 million for existing-home sales in 2016, which would be the best year since 2006 (6.48 million). In March, existing-home sales rose 5.1 percent to a seasonally adjusted annual rate of 5.33 million in March from a downwardly revised 5.07 million in February and 1.5 percent year-over-year.
“The housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fueled by the grossly inadequate number of new single-family homes being constructed,” Yun said. “The good news is that pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer.”
Here is the lineup for the week:
Monday, May 16, 2016
National Association of Home Builders (NAHB) Housing Market Index (HMI) 10:00 A.M. EST
Tuesday, May 17, 2016
U.S. Census Bureau and HUD Residential Data 8:30 A.M. EST
Wednesday, May 18, 2016
Federal Open Market Committee Minutes 2:00 P.M. EST
House Financial Institutions and Consumer Credit Subcommittee hearing, “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?”, 2:00 P.M. EST
Friday, May 20, 2016
National Association of Realtors (NAR) Existing-Home Sales 10:00 A.M. EST