You may recall that last month I wrote about how a cynic might view the Consumer Financial Protection Bureau’s arbitration rule and its corresponding ban on class-action waivers in predispute arbitration agreements.
My cynic held the view that the rule, while purporting to be only a ban on waivers, was really just a back-door attempt at outright banning arbitration agreements in consumer financial products and services. After closer review, my cynic is more convinced than ever that his original view is both correct and supported by the text of the rule.
Let’s review what the rule does:
- It bans the use of waivers in pre-dispute arbitration agreements;
- It permits mandatory pre-dispute individual arbitration to continue, but requires significant reporting to the CFPB about the claims and outcomes of the dispute; and
- It allows the CFPB to make public on its website all of the information reported to it, redacting only consumer names.
