Just when you thought that the practical operational restraints imposed by the new Administration had limited (i.e., handcuffed) the Consumer Financial Protection Bureau’s ability to engage in new mischief-making (i.e., new rule-making), today the CFPB issued its arbitration rule.
Last Wednesday, a federal district court in Arizona held that a TCPA plaintiff was compelled to arbitrate his dispute against the holder of his wife’s lease solely because his wife had agreed to an arbitration agreement in connection with the lease.
In Zambrana v. Pressler & Pessler LLP, the Southern District Court of New York stayed a putative class action against various creditors for alleged violations of the Fair Debt Collection Practices Act (FDCPA), referring the matter to arbitration.
What You Need to Know about CFPB’s Proposal to Ban Mandatory Arbitration Clauses in Financial Contracts
On May 5, 2016, the Consumer Financial Protection Bureau (the “CFPB”) published in the Federal Register its 376-page proposed rule to limit the use of mandatory arbitration clauses in certain financial contracts.
Are contractual arbitration clauses harmful to consumers of financial products and services? The CFPB appears to think so. But is the CFPB’s view empirically or legally well-founded?