The Consumer Financial Protection Bureau has issued a proposed rule prohibiting mandatory arbitration clauses in a wide variety of contracts. Coming as no surprise to industry watchers, the CFPB is seeking comment on a proposal to prohibit companies from using mandatory arbitration clauses in their arbitration agreements with consumers. Companies would still be able to include arbitration clauses in their contracts, but for contracts subject to the proposal, the clauses would have to say explicitly that they cannot be used to stop consumers from being part of a class action in court. The proposal would provide the specific language that companies must use. The proposal would also require companies that use pre-dispute arbitration agreements to submit to the CFPB claims, awards, and certain related materials filed in arbitration cases. This would allow the Bureau to monitor consumer finance arbitrations to ensure that the arbitration process is fair for consumers. The Bureau is also considering publishing information it would collect in some form so the public can monitor the arbitration process as well.

 News Release

 Notice

 Small Business Review Panel Report

 CFPB Arbitration Report (March 2015)