On Monday, during “The CFPB Speaks” panel I moderated that was part of the Practicing Law Institute’s 22nd Annual Consumer Financial Services Institute in Manhattan, Diane Thompson, Deputy Assistant Director of the CFPB’s Office of Regulations, reported that the CFPB is still reviewing comment letters on its proposed arbitration rule (which would preclude the use of class action waivers) and gave no timetable as to when it will issue a final arbitration rule.
Yesterday, on another panel, “Hot-Button Consumer Financial Services Issues,” Deepak Gupta and Paul Bland debated whether Director Cordray should issue a final arbitration rule. Currently in private practice, Deepak practiced law for several years at Public Citizen Litigation Group and the CFPB. Paul is Executive Director of Public Justice.
Paul took the position that Director Cordray should issue a final rule because there is a reasonably good chance that there would be insufficient votes in the Senate to override it under the Congressional Review Act. Paul indicated that polling and focus groups of consumers support the CFPB’s issuance of a rule.
Deepak observed that Director Cordray is in a tight spot since if he issues a final rule, there is a high risk that Congress will pass and President Trump will sign a resolution overriding the rule under the CRA. He pointed out that Congress and President Trump have already utilized the CRA to override several regulations issued by other agencies. Deepak noted that if the CRA were to be used to override a final arbitration rule, the CRA would prohibit the CFPB from promulgating a rule that is substantially the same at any time in the future. Playing “devil’s advocate,” Deepak suggested that Director Cordray consider waiting to issue the rule at some time in the future when there is no risk of a CRA override.