Consumer Finance Insights
May 9, 2016

Consumer Financial Protection Bureau Proposes Rules Prohibiting Class-Action Waivers in Arbitration Agreements

On May 5, 2016, the Consumer Financial Protection Bureau issued long-expected proposed rules that will drastically limit the use of pre-dispute arbitration clauses in contracts for consumer financial products and services. First, the proposed rules would prohibit pre-dispute arbitration agreements that bar consumers from filing or participating in a class action. Second, for those consumer disputes that are arbitrated, the proposed rules would require the financial services companies that engage in arbitration to submit various arbitration records to the Bureau, including claims and awards, so that the Bureau can monitor these arbitrations “to ensure that the arbitration process is fair for consumers.”  Click here to read the full Goodwin Procter Client Alert addressing the new proposed rule, authored by Goodwin Procter Partner Laura Stoll and associate Joe Robbins.