Congress Urges CFPB to Speed Up Rulemaking on Arbitration Provisions in Consumer Contracts

The federal Consumer Financial Protection Bureau (CFPB) was urged this week by some in Congress to speed up its rulemaking aimed at arbitration provisions in consumer contracts used by companies offering payment services or financial products to consumers. In May, the preliminary rule was released. In Arbitration Provisions Mauled by Consumer Watchdog, my colleagues Amy Pierce, Andrew Caplan, and I discussed the proposed rule and the potential new reality for all consumer facing companies. At the heart of the proposal, the CFPB would ban consumer financial services providers from requiring consumers to waive class action rights in connection with pre-dispute arbitration clauses. (In a minor victory for the industry, the CFPB has not outright banned pre-dispute arbitration agreements—at least not yet.)

Additional Sources: CFPB’s Report to Congress: To Arbitrate Consumer Financial Services Claims or Not; CFPB’s Arbitration Study—A Warning to Consumer Financial Service Companies

Photo:  CafeCredit.com, CFPB, Uploaded June 13, 2016 – Creative Commons