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ARTICLE · 18 MAY 2016

CFPB Proposes New Rule On Mandatory Consumer Arbitration Clauses

Jones Day
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Arbitration as a means of dispute resolution is intended to help consumers and businesses save time and money and achieve fair results when compared to traditional litigation.

United StatesFinance and Banking
Lisa Ledbetter
Lisa Ledbetter
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Arbitration as a means of dispute resolution is intended to help consumers and businesses save time and money and achieve fair results when compared to traditional litigation. Millions of contracts for consumer financial products and services have a pre-dispute arbitration clause that requires consumers and financial institutions to resolve their disputes through arbitration, rather than through the court system.

On May 5, 2016, the Consumer Financial Protection Bureau ("CFPB" or "Bureau") issued a controversial notice of proposed rulemaking that would impose two severe limitations on the use and efficacy of pre-dispute arbitration clauses in contracts for consumer financial products and services:

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