Summary offers insights to ‘arbitration agreements’ proposal
June 15, 2016 -- A summary of the “arbitration agreements” proposed rule by the CFPB has been posted on the NASCUS website, outlining a number of separate “comment requests” from the bureau on the proposal.
CFPB proposed the rule in May, which would establish a new section in the Code of Federal Regulations (CFR) pertaining to consumer finance dispute resolution, but specifically prohibiting “covered providers” of certain consumer financial products and services from using a consumer agreement that provides for arbitration of future disputes between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer product or service.
Additionally, the proposal would require a covered provider that is involved in arbitration pursuant to a pre-dispute arbitration agreement to submit specified “arbitral” records to the Bureau.
The separate comment requests outlined in the NASCUS summary represent highlights of the proposal; all requests for comment are not noted. For example, the NASCUS summary focuses on definitions of consumer and provider; whether the term “arbitration” should be defined; the approach to “covered” products/services; the scope of exclusions under the proposal; clarification on the limitations of use of pre-dispute arbitration agreements; compliance date and temporary exceptions; potential benefits, costs, and impacts.
Comments on the proposal rule are due to the CFPB by Aug. 22.