CFPB Unleashes Draft Rule On Arbitration Clauses

Law360, New York (May 5, 2016, 12:02 AM EDT) -- The Consumer Financial Protection Bureau released a highly anticipated proposed rule Thursday to ban consumer financial services providers from prohibiting customers, through contracts with mandatory arbitration clauses, from filing or joining class actions.

In advance of a hearing Thursday in New Mexico regarding the proposed rule, the CFPB said in a statement that allowing class actions will stop banks and other firms from "sidestepping the legal system" and create accountability that they used to be able to dodge.

"Signing up for a credit card or opening a bank account can often mean signing away your right to take the company to...

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