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ARTICLE · 16 MAY 2016

The CFPB's Proposed Anti-Arbitration Rule

Mayer Brown
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The rule just proposed by the Consumer Financial Protection Bureau to regulate arbitration agreements is not a surprise: the Bureau has said for months that it was developing such a rule.

United StatesFinance and Banking
Andrew Pincus
Andrew Pincus
Steven Kaplan
Steven Kaplan
Archis Parasharami
Archis Parasharami
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The rule (pdf) just proposed by the Consumer Financial Protection Bureau to regulate arbitration agreements is not a surprise: the Bureau has said for months that it was developing such a rule.

This post examines the details of the proposal—how it would regulate arbitration, its scope, and its effective date. We also discuss the course of the rulemaking process, including potential judicial review of any final rule. In a future post, we'll evaluate the CFPB's purported justifications for the regulation.

The bottom line: The CFPB's proposal is effectively a blanket ban on the use of arbitration by companies in the consumer financial services arena. It is an attempt to overrule by regulation the Supreme Court's landmark decision five years ago in AT&T Mobility LLC v. Concepcion (in which we represented AT&T). Businesses that are concerned about the ramifications of this proposal will have 90 days from the date the proposal is published in the Federal Register

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