The Consumer Financial Protection Bureau (“CFPB”) announced on October 7, 2015, that it is proposing rules to permit arbitration clauses that will allow consumers to bring class action lawsuits.
Consumers can still proceed with individual arbitrations if they so choose. Most lenders only want arbitration for the purpose of banning class actions (only a tiny number of consumers ever arbitrate cases on an individual basis), so this will surely cause howls from the financial service industry. In addition to allowing class actions, the CFPB is also proposing that lenders must report information to the CFPB about every individual arbitration that is handled. This should limit the abuses reported about lenders in individual arbitrations in that the CFPB will be monitoring how those are conducted and the outcomes of them.