CFPB Rule Prohibits Financial Services Providers from Blocking Consumer Class Actions in Arbitration Agreements

Sullivan & Cromwell LLP - September 18, 2017

The Consumer Financial Protection Bureau’s rule, which went into effect today, (i) prohibits providers of certain consumer financial products and services from requiring consumers to waive class actions in pre-dispute arbitration agreements and prescribes notice clauses for covered arbitration agreements, and (ii) requires these providers to submit certain records relating to arbitral and court proceedings to the Bureau. The Senate may still act to block it. Financial institutions have until March 19, 2018 to implement the rule.