CFPB Proposes Limits On Companies' Use Of Arbitration Clauses

Anthony DiResta is a Partner and Brian Goodrich is an Associate in Holland & Knight's Washington D.C. office

The Consumer Financial Protection Bureau (CFPB) has proposed new rules that would ban companies' use of arbitration clauses that prevent consumer class action lawsuits. The potential new rules, announced this month, would also require companies to report individuals' arbitrations to the CFPB. Companies that offer financial services and products – including credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto loans, auto title loans, small dollar or payday loans, private student loans and installment loans – would be affected. If enacted, these rules will greatly restrict how companies may use arbitration clauses and allow for greater scrutiny by the CFPB.