View Rule

In July 2016, the Bureau finalized a rulemaking concerning the use of agreements providing for arbitration of any future dispute between covered persons and consumers in connection with the offering or providing of certain consumer financial products or services. The rulemaking followed on a report that the Bureau issued to Congress in March 2015 as required by the Dodd-Frank Act, as well as on preliminary results of arbitration research that were released by the Bureau in December 2013, and a May 2016 Notice of Proposed rulemaking. The Bureau received more than 110,000 comments in response to the proposal. The rule prohibited covered providers of certain consumer financial products and services from using an arbitration agreement to bar the consumer from filing or participating in a class action. Under the rule companies would still have been able to include arbitration clauses in their contracts. However, for contracts subject to the rule, the clauses would have had to say explicitly that they cannot be used to stop consumers from being part of a class action in court. The rule also required a covered provider that has an arbitration agreement and that is involved in arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau.  Congress passed a joint resolution under the Congressional Review Act disapproving the arbitration rule; the President signed the joint resolution on November 1, 2017. Under the resolution, the arbitration rule shall have no force or effect.”