CFPB announces draft rules to forbid lenders from imposing class action bans in arbitration clauses

October 19, 2015 by

fine printThe 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.

Categories: Forced Arbitration

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Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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