Concerned that arbitration agreements block class actions and reduce compliance incentives, the CFPB has issued a final rule addressing “pre-dispute arbitration agreements”, or agreements that provide for arbitration of future disputes. The Rule will apply to consumer credit, consumer deposit accounts, and other consumer financial products and services. The Rule will:
- Require pre-dispute arbitration agreements to include specific language stating that the agreement cannot stop a consumer from filing or being a member of a class action. There is also a limited exception for reloadable prepaid cards under certain conditions.
- Require certain arbitration and court records to be submitted to the CFPB (to be posted online) if you use pre-dispute arbitration agreements after the required compliance date.
There will also be requirements if you enter into an existing pre-dispute arbitration agreement after the required compliance date, if the agreement doesn’t include the specifically required language. The Rule is effective 60 days after publication in the Federal Register. Compliance is required beginning on the 241st day after publication in the Federal Register.
Diane joined Banker’s Compliance Consulting with over 10 years of compliance experience and over 15 years of experience within the financial industry. Diane is a Certified Regulatory Compliance Manager (CRCM) and has a Bachelor’s Degree in Sociology with a concentration in Criminal Justice. She is a graduate of the Schools of Banking Compliance School and has participated in various other training opportunities throughout her career. Diane understands firsthand the struggles banks face in building and maintaining successful compliance programs. Her experience and common sense approach to consumer compliance is a great asset to our clients.
Diane and her husband have two kids who keep them busy. She enjoys running and other sports and is a big Bugs Bunny fan! She’s a bit crazy in that she does enjoy reading some of these regulations and she’s a “crazy cat lady!” Her cat tales are hilarious!