Today will mark one week since President Trump signed H.J. Res. 111, the joint resolution passed by the House and Senate disapproving the CFPB arbitration rule.
Since that time, there has been no official statement from the CFPB about the override of the arbitration rule. The arbitration rule was not mentioned in Director Cordray’s remarks to the CFPB’s Consumer Advisory Board at its November 2 meeting.
The arbitration rule became effective on September 18, 2017, with a March 19, 2018, mandatory compliance date. Under the, Congressional Review Act, enactment of a resolution of disapproval blocks a rule from taking effect or continuing. Accordingly, the signing of the joint resolution by President Trump means the CFPB arbitration rule became ineffective as of November 1.
Other agencies whose rules were disapproved under the CRA earlier this year have published notices in the Federal Register that reference the CRA overrides and remove the disapproved rules from the Code of Federal Regulations. We assume the CFPB will publish a similar notice removing the arbitration rule from the Code of Federal Regulations.
As of today, however, the final arbitration rule, with its effective and mandatory compliance dates, continues to be posted on the CFPB’s website with no indication of the CRA override. If the CFPB is planning to wait until its notice is published before removing the rule from its website, it should at least update the website in the meanwhile to note the CRA override.
On November 29, 2017, from 12 p.m. to 1 p.m. ET, Ballard Spahr attorneys will hold a webinar, “Now that the CFPB’s Arbitration Rule is Dead, How Should the Industry React?” For more information and a link to register, click here.