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.

CFPB Adopts Interim Final Rules

Last week, the CFPB finalized interim final rules that the Bureau issued over four years ago in connection with the transfer of rulemaking authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Dodd-Frank, which was signed into law in July of 2010, established the CFPB and transferred rulemaking authority for a number of federal consumer financial laws from seven different federal agencies to the CFPB.

Director Cordray testifies before Senate Banking Committee

On April 7, 2016, the Senate Banking Committee held a hearing on the Consumer Financial Protection Bureau’s Semi-Annual Report to Congress and featured testimony from CFPB Director, Richard Cordray. This hearing followed Director Cordray’s appearance before the House Financial Services Committee in March, but unlike the House hearing, exchanges between Republican Senators and Director Cordray remained civil despite vehement disagreement on a number of issues.