On July 10, 2017, the Consumer Financial Protection Bureau (CFPB) dropped the other shoe and issued final rules prohibiting “providers of consumer financial products and services in the core consumer financial markets of lending money, storing money, and moving or exchanging money” from “using a pre-dispute arbitration agreement to block consumer class actions in court.” The final rules also require covered providers to insert language “reflecting this limitation” in contracts with pre-suit arbitration clauses. Completing the trifecta, the new rules require “providers that use pre-dispute arbitration agreements to submit certain records relating to arbitral and court proceedings to the Bureau,” which will use the information to monitor use of arbitration clauses regarding “whether there are developments that raise consumer protection concerns that may warrant further Bureau action.” The CFPB also intends to create a website providing “greater transparency into the arbitration of consumer disputes.”
Continue Reading The Sound of Shoes Dropping: CFPB Moves to Bar Class Action Waivers