House Subcommittee Questions CFPB’s Arbitration Rule

On Wednesday, May 18, the House Financial Institutions and Consumer Credit Subcommittee held a hearing entitled, “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?” The hearing follows the release of Consumer Financial Protection Bureau’s (CFPB) Notice of Proposed Rulemaking covering the use of arbitration agreements containing class action waivers in consumer financial services contracts on May 5, 2016.

Google bans payday lender ads

On May 11, Google announced that it will no longer accept ads promoting payday, auto title or other high cost installment loans that require repayment within 60 days from the date the loan is issued. The change to the Google AdWords policy also includes a ban on paid advertisements for high-interest loans with an annual percentage rate of 36% or greater.

CFPB issues proposed arbitration rule

On May 5, 2016, the Consumer Financial Protection Bureau (CFPB) held a field hearing in Albuquerque, New Mexico to announce the release of its proposed rule regarding the use of arbitration agreements in consumer financial services contracts. The proposed rule would prohibit covered providers of certain consumer financial products and services from using arbitration agreements containing class action waivers to prevent consumers from filing or participating in a class action litigation to resolve disputes with certain consumer financial product and service providers. The proposal would also require that any covered provider involved in an individual arbitration in accordance with a pre-dispute arbitration agreement submit certain records relating to arbitral proceedings to the Bureau.