Attorneys General Issuer Letter Supporting CFPB Arbitration Clause Rule

On Thursday, August 11th, Attorneys General from 18 States and the District of Columbia sent a letter to the CFPB, stating their support for the Bureau’s recent proposed arbitration clause rule. The CFPB proposal would limit the use of mandatory arbitration clauses in consumer financial services contracts.

In their letter, the Attorneys General wrote that they support the rule because it would “restore significant and much-needed consumer protections that have been eroded through the inclusion by financial services companies of mandatory arbitration clauses in their contracts with consumers.” The letter also suggests several changes to the rule. It requests that the CFPB adjust one of its provisions so that in addition to covered entities being required to submit initial claim filings and written awards in arbitration proceedings to the Bureau, the information be made public on the bureau’s website. The letter also recommends that the CFPB impose deadlines for the reporting of such materials, enforced by strict penalties.

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