This Letter to the Editor was received in response to Kevin Wack's article "As CFPB Studies Arbitration, Lobbying Intensifies," which ran on AmericanBanker.com on Dec. 10, 2012.
The purpose of Pew's study, "Banking on Arbitration: Big Banks, Consumers, and Checking Account Dispute Resolution," referenced in this article, was to study what consumers know about dispute resolution clauses. Surveying a sample of all consumers, not only those who have gone through arbitration, was the right approach. This is particularly important because most checking accountholders are covered by these clauses and may not be aware of them. This issue has been documented in previous Pew reports.
The consumers we surveyed are essentially conflicted about binding mandatory arbitration: They support the purpose of the system – to prevent frivolous lawsuits and offer a faster and cheaper alternative to litigation – but they do not like the specific requirements and limitations that arbitration imposes. It is our hope that Pew's assessment of public attitudes about and understanding of mandatory binding arbitrations, as well as the work of other interested parties, will inform policymakers and the Consumer Financial Protection Bureau as they develop their recommendations in this area.
Susan Weinstock is a director at The Pew Charitable Trusts.