Richard Frankel (Drexel University Thomas R. Kline School of Law), Addressing Mandatory Arbitration in an Age of Federal Dysfunction, 38 Loyola Consumer Law Review 183 (2026) on SSRN. Here is the abstract:
The second Trump Administration has waged war against consumers and against the federal agencies that seek to protect consumers. It has tried to shut down the Consumer Financial Protection Bureau, expand the President’s authority to exert iron-fisted control over agency directors, and significantly shrink the federal workforce that in the past has sought to advance consumer protection. While these attacks on agencies have been highly publicized, one important aspect of the Trump Administration’s actions toward consumers that has fallen under the radar involves binding mandatory arbitration. Although it is not particularly well known, the federal government plays a unique role in regulating arbitration. This is because the U.S. Supreme Court has interpreted the Federal Arbitration Act (FAA) — a 100-year-old law originally designed to allow arbitration of commercial disputes between merchants — to broadly preempt most state laws, regulations, and judicial decisions related to arbitration. While the FAA largely eliminates state power over mandatory arbitration, both Congress and federal agencies retain authority to regulate arbitration in various ways. Yet, with a Congress that is becoming less interested in enacting legislation with each passing year, and with a severely decapitated federal bureaucracy, the chances that the federal government will capably respond to the risks presented by mandatory arbitration seem slim to none. This essay examines the implications of giving the federal government virtually exclusive domain over mandatory arbitration in an age of federal government dysfunction. It suggests that the current moment presents a valuable opportunity to reconsider the doctrine of FAA preemption and to look at models for federal-state cooperation in addressing the most serious risks of mandatory arbitration. It also proposes that states take the lead in determining which actions they can take without violating the FAA, and in expanding the work they do to protect the consumers whom the federal government has chosen to abandon.
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