Arbitration Rule Compliance Date Set For March 19, 2018

Financial institutions with arbitration clauses in consumer contracts are on the clock. The Consumer Financial Protection Bureau's (CFPB) new Arbitration Rule was published in the Federal Register today, with an effective date of September 18, 2017 and a compliance date of March 19, 2018. Absent congressional action or successful litigation challenge, those financial institutions that are covered by the Rule must roll out revised arbitration agreements within eight months.

As we covered previously, the CFPB issued its final Rule on July 10, 2017 banning arbitration provisions for covered entities, as well as requiring such entities to provide information to the Bureau regarding any efforts to compel arbitration. Subject to certain enumerated exemptions, the Rule applies to most "consumer financial products and services" that the CFPB oversees, including those involving money, storing money, moving or exchanging money, and "affiliates" of such companies when those