CFPB Arb Rule Appears Dead

Last night, Vice President Pence broke a 50-50 tie vote in the U.S. Senate, narrowly approving repeal of a rule that blocked financial companies from requiring consumers to resolve disputes with individual arbitration proceedings. The Senate vote followed earlier House approval and now goes to President Trump for his expected signature into law. The action is a defeat to the Consumer Financial Protection Bureau (CFPB), the federal financial industry watchdog group created under President Obama that approved the rule last summer with an effective date of March 19, 2018. It allowed consumer class actions against credit card companies and other financial institutions. The CFPB rule would have required sending a notice or to amend an arbitration agreement if entered into on or after March 19th and offered variable examples of language to use for agreements applying to multiple products or services, if not all were covered by the rule. According to the CFPB, there were two main parts: First, the final rule prohibited covered providers of certain consumer financial products and services from using an agreement with a consumer that provided for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service. Second, the final rule required covered providers involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The bureau also adopted official interpretations to the proposed regulation. See full story here-- https://usat.ly/2h6FFIz and final rule language here-- http://bit.ly/2yKBRak