CFPB Arbitration Rule

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The CFPB is scheduled to publish a notice in tomorrow’s Federal Register removing the agency’s final arbitration rule from the Code of Federal Regulations (CFR).  The rule was originally published in the Federal Register on July 19, 2017.  However, Congress disapproved the rule under the Congressional Review Act on October 24, 2017, and President Trump signed the joint resolution into law on November 1, 2017. … Continue Reading

Two weeks after President Trump signed H.J. Res. 111, the joint resolution passed by the House and Senate disapproving the CFPB arbitration rule, the CFPB has formally acknowledged Congress’ override of the rule under the Congressional Review Act.  The following notice is now posted at the head of the section of the CFPB’s website dealing with the arbitration rule:

“On Nov.… Continue Reading

CFPB Director Richard Cordray yesterday sent a letter to President Trump asking him to uphold the Bureau’s arbitration rule even though the Senate recently joined the House in authorizing a repeal of the rule under the Congressional Review Act.

Director Cordray’s letter states that without the arbitration rule, military service members will “get cheated out of their hard-earned money and be left helpless to fight back.”   … Continue Reading

In a scathing report released today, the U.S. Department of the Treasury concludes that the CFPB’s final arbitration rule “failed to meaningfully evaluate whether prohibiting mandatory arbitration clauses in consumer financial contracts would serve either consumer protection or the public interest — its two statutory mandates.”  Moreover, according to the report, the arbitration rule will impose “extraordinary” economic costs on businesses and consumers by generating a “massive” increase in class action litigation that will not benefit consumers but will effect a “large wealth transfer” to their lawyers.… Continue Reading

In an important development in the federal court lawsuit by industry groups seeking to overturn the CFPB’s arbitration rule, the plaintiffs yesterday filed a motion for a preliminary injunction.  The motion requests entry of an order “that (1) enjoins the 180-day implementation period, which commenced on the date the Rule became effective, so that—if the Rule ultimately is upheld—plaintiffs’ members will have the full 180-day implementation period established by the Rule to come into compliance; and (2) prohibits defendants from implementing or enforcing the Arbitration Rule pending the completion of judicial review.” … Continue Reading

Since last summer, Acting U.S. Comptroller of the Currency Keith A. Noreika and CFPB Director Richard Cordray have exchanged polar-opposite views on whether the CFPB’s final arbitration rule should be repealed.  Both are seeking to persuade Senators who may still be undecided as the deadline for Congressional Review Act action draws closer.… Continue Reading

The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.… Continue Reading

The Military Lending Act (MLA) will apply to credit card accounts starting Tuesday, October 3. The final rule took effect last October but provided a one-year exemption for “credit extended in a credit card account under an open-end (not home-secured) consumer credit plan.” Although the final rule permits the Secretary of Defense to extend the exemption for up to one year (October 3, 2018), the DoD declined to do so and is allowing the exemption to expire next week.… Continue Reading