On July 19, 2017, the Consumer Financial Protection Bureau (CFPB) published the final Arbitration Agreements Rule (the rule) that would impact the way claims involving consumer financial products and services are handled in the future. The rule prohibits providers of consumer financial products and services from relying on a predispute arbitration agreement that includes an arbitration clause that bars a consumer from filing or participating in a class action.
The rule would apply to “providers” of covered consumer financial products and services. The rule defines a “provider” as:
- A person or entity that engages in an activity that is a covered consumer financial product or service if not otherwise excluded for the rule, or to the extent that the person is not specifically excluded from coverage under the Arbitration Agreements Rule; or
- An affiliate of such a person, when the affiliate is acting as that person’s service provider.
Generally, covered products or services are those offered or provided to consumers primarily for personal, family or household purposes, or that are offered or provided in connection with another financial product or service that is offered or provided to consumers primarily for personal, family or household purposes. The rule covers various consumer financial services, including, but not limited to, core banking depository and consumer credit products, debt relief providers, servicing or collecting certain credit products, and check cashers. Continue Reading