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ARTICLE · 23 JANUARY 2025

CFPB Proposes Rule To Protect Consumers From Unfair Contract Clauses

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On January 13, 2025, the CFPB announced a proposed rule aimed at prohibiting companies from including in consumer agreements terms that operate...

United StatesConsumer Protection
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
Maxwell Earp-Thomas
Maxwell Earp-Thomas
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On January 13, 2025, the CFPB announced a proposed rule aimed at prohibiting companies from including in consumer agreements terms that operate to waive consumers' legal rights, allow companies to unilaterally change key terms, or restrict consumers' lawful free expression. The CFPB has made a preliminary determination that the use of such terms may constitute an unfair or deceptive act or practice under the Consumer Financial Protection Act (CFPA). See 12 U.S.C. 5531(b).

In its proposal, the CFPB expresses concern that certain contract clauses can force consumers to waive important rights or face restrictions on their freedom of speech and are presented to consumers on a "take it or leave it" basis. The Bureau is particularly focused on contract clauses buried in fine print that it alleges suppress free speech, rule of law, or undermine due-process. The Bureau asserts that these types of clauses can create an unfair advantage for companies and ultimately deceive

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