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The CFPB has released its long-awaited notice of proposed rulemaking that would ban consumer financial companies from using mandatory pre-dispute arbitration clauses in consumer financial product and service contracts. The proposed rule would eliminate arbitration clauses that limit consumer participation in class actions and require submission to the CFPB (and, potentially, public posting) of arbitral claims and awards. The proposed rule will also require companies to amend current contracts or provide notice to consumers of the change.
The proposed rule would affect entities covered by the Consumer Financial Protection Act, including providers of consumer financial products and services offering credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto loans, short-term small-dollar loans, and private student loans.
The CFPB is seeking comment on the scope of the proposed rule to determine whether certain products or services should not be covered. The comment period will be particularly relevant for those products and services that may be exempted, such as certain forms of payment processing, credit counseling, credit monitoring, and others.
Please join our complimentary webinar for a practical conversation about what the proposed arbitration clause ban means for companies and consumers. Members of Venable's CFPB practice group will review the current state of the rulemaking process and outline what you and your company need to know about what’s ahead. Our experienced practitioners will share their take on the Bureau’s proposal, from regulatory and litigation perspectives.
Topics will include:
- Overview and statutory background of the CFPB’s proposed rule;
- Current state of the rulemaking process: what to expect and when;
- Effect on industry and consumers: what the Bureau seeks and how the proposal will affect companies and consumers;
- Next steps: what companies can expect and how they may want to respond;
- Moving forward: how the industry and consumers will be affected by the proposal; and
- Challenging the proposed rule: how industry can shape the proposal during the comment period.
This session will focus on industry participants who can expect to be affected by the Bureau's proposed rule. Participants are encouraged to engage in the conversation by submitting questions throughout the live event and will receive a copy of the presentation and other materials following the webinar.
Allyson B. Baker, Esq., Partner, Venable LLP