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Rules & Regulations

New CFPB Rule Would Block Mandatory Consumer Arbitration – That Should Go Over Big

July 10, 2017

Later today, the consumer watchdog agency, Consumer Financial Protection Bureau (CFPB), is expected to release a final rule that blocks financial institutions - credit card companies, banks and other firms - from forcing customers to agree to settle disputes only through arbitration as a condition of opening accounts. Among other things, the rule, which was drafted more than a year ago, would make it easier for customers to join class action lawsuits.


The Trump administration, as well as many Republican legislators, will seek to repeal the new rule because they not only view class actions as a waste of time and money, but because they oppose the independent standing of this government agency. 


Under the Congressional Review Act - a 1996 law that had been rarely used before the current Congress employed it to reverse 14 rules from the Obama administration - lawmakers have 60 legislative days to overturn the rule blocking mandatory arbitrations. The rule could take effect next year.