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Consumer Credit Regulation: 2.2.7.3.3 Covered creditors

The CFPB’s rulemaking authority extends to virtually everyone in the financial services area, including banks, credit unions, mortgage lenders, credit bureaus, auto finance companies, debt collectors, student lenders, and payday lenders.

Consumer Credit Regulation: 2.3.9 Pawnbroker Statutes

Pawnbroking is a form of secured lending that usually involves a small principal, a short term, and a high interest rate.333 It differs from small loan lending in that the pawnbroker takes physical possession of the security pledged by the borrower at the time the loan is made.334 When the loan is repaid, usually in a lump sum, but occasionally in installments, the collateral is returned to the borrower.

Consumer Credit Regulation: 2.4.1.3.1 Overview

The typical state UDAP statute prohibits unfair (or unconscionable) and deceptive acts and practices in broad terms, and includes a non-exhaustive list of specific prohibitions. Some, however, include a broad prohibition only of deceptive, not unfair acts, and a few prohibit only a closed list of specific practices, without any broad, general prohibitions that are enforceable by consumers.

Consumer Credit Regulation: 2.4.1.3.2 Overreaching, unfairness

The broad prohibitions against unfairness or unconscionability found in many UDAP statutes are particularly well-suited to challenging overreaching credit terms.398 Most state UDAP statutes prohibit unfairness, a broad and flexible concept that takes the extent of consumer injury into account.399 Excessive credit charges and fees can be challenged as unfair under these statutes.400 Lending without regard to the consumer’s ability to repay the oblig

Consumer Credit Regulation: 2.4.1.3.3 Loan padding and similar manipulations

An allegation of “loan padding”—structuring a loan to increase its size without advancing additional funds to borrowers, thereby increasing lender profit or enabling the creditor to reach more collateral—states a cause of action under a state UDAP statute.410 Similarly, packing a loan with worthless products states a UDAP claim.411 Falsely representing that credit insurance is required is a UDAP violation.412 A lender may commit an unfair and decep

Consumer Arbitration Agreements: 6.1 Introduction

Because “arbitration is simply a matter of contract between the parties,”1 to which ordinary principles of contract law generally apply, a party may waive its right to compel arbitration, just as it may waive any other contractual right.2 Waiver is a “generally applicable contract defense” that, pursuant to section 2 of the Federal Arbitration Act (FAA),3 may be applied to invalidate an arbitration agreement.4 The us

Consumer Arbitration Agreements: 6.3.2.1.1 General

The general test for waiver of a contract right is whether the party acted inconsistently with a known right.42 (As will be discussed in § 6.3.3, infra, many courts historically added the element of prejudice to this test when considering waiver of the right to arbitrate

Consumer Arbitration Agreements: 6.3.2.1.2 Factors to consider

The determination of whether a party has waived the right to arbitrate by acting inconsistently with an arbitration agreement due to litigation-related conduct entails a fact-based analysis of the totality of the circumstances. Case law addressing the doctrine has looked at a number of different kinds of litigation conduct. For purposes of an overview, the Texas Supreme Court created a list of just some of the questions that might come up when analyzing whether waiver has occurred in this context:

Consumer Arbitration Agreements: 6.3.2.3 Debt Collection Lawsuit As Waiver of Arbitration Requirement for Subsequent Consumer Litigation

In general, courts are unlikely to find waiver of the arbitration requirement based on conduct in a different litigation unless “the litigation was between the same parties and involved essentially the same claim as the one to be arbitrated.”76 An important example of waiver involving conduct in a different litigation is when the collector uses the courts to pursue a collection action.

Consumer Arbitration Agreements: 6.3.2.4 Filing Pleadings

Many courts view a party’s filing of a complaint as inconsistent with that party seeking the right to arbitrate the case after the opposing party files counterclaims.87 Some courts, similarly, find waiver when a party files a counterclaim or a third-party complaint.88

Consumer Arbitration Agreements: 6.3.2.5 Motions to Dismiss or for Summary Judgment or Otherwise Asking the Court to Address the Merits

Courts hold that a party generally cannot seek to compel arbitration after submitting arguments on the merits of the case to a court by, for example, filing a motion to dismiss or a motion for summary judgment.97 Indeed, some courts suggest that taking an overt act to have a dispute decided on the merits in court automatically waives the right to arbitrate the same dispute.98 This principle of waiver through inconsistent conduct can also apply to threshold questions of arbi

Consumer Arbitration Agreements: 9.4.1.4 California Law Protects Consumers When Business Fails to Pay

A California statute, effective January 1, 2020,70 provides significant rights to consumers and employees when the business they are in arbitration with fails to pay initial arbitration fees, or other costs assessed on the business during the arbitration. There are separate provisions depending on whether the business fails to pay initial fees or ongoing costs. This discussion, while applicable to employees as well as consumers, will use the term consumers.