THE CHICKEN OR THE EGG: THE PROPER ORDER OF ANALYSIS WHEN DETERMINING THE ENFORCEABILITY OF A DELEGATION CLAUSE AND THE BROADER ARBITRATION AGREEMENT IN CONSUMER CONTEXTS.

This article explores the use of mandatory arbitration clauses in consumer contracts, focusing on the concerns surrounding their impact on consumers and the need for protection. It discusses the use of arbitration agreements by predatory payday lenders to evade lending laws, particularly through partnerships with Native American tribes. The article suggests a framework for analyzing delegation clauses and unenforceability claims, and recommends that courts follow the example set by certain circuits in finding agreements that waive a borrower's federal statutory rights to be unenforceable. It also proposes changes to current FAA rules regarding arbitration between companies and consumers. The text highlights the lack of consumer protections in arbitration agreements, the violation of the effective vindication doctrine, and the issue of class action waivers. It also addresses the differing interpretations of courts regarding delegation clauses and prospective waivers of rights, arguing for a uniform application of the prospective waiver doctrine. The article concludes by discussing the split in the interpretation of the FAA and its impact on consumer protection laws, and suggests that the Supreme Court needs to settle this issue. It further emphasizes the potential for abuse by tribal lending companies and proposes standardized tests and legislation to strengthen consumer protections while preserving the use of arbitration agreements. Overall, the text emphasizes the need to balance the expansion of arbitration with safeguards for consumers. [Extracted from the article]