House Democrats Send Letter to CFPB in Support of Arbitration Rule

On Wednesday, August 3rd, a letter signed by 65 House Democrats was sent to CFPB Director, Richard Cordray, underscoring their strong support for the Bureau’s proposed rule to prohibit the use of class-action waivers in arbitration agreements for financial services products. The group, led by Reps. Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services; John Conyers, Jr. (D-MI), Ranking Member of the Judiciary Committee; and Hank Johnson, Jr. (D-GA), voiced concern that without the rule, arbitration clauses "enable corporations to avoid public scrutiny by precluding access to the courts.” The letter bases this argument on findings from a CFPB study which it claims “unequivocally demonstrates that the proposed rule is necessary to the public interest and consumer welfare.”

The CFPB issued its proposed rule in early May and has since begun receiving public comment on it. Its release represents the culmination of the nearly six year period since the agency was directed to study arbitration and propose rules based on its findings by the 2010 Dodd-Frank Act.

SFIG will be submitting a response highlighting the significant concerns that our members have with this proposal. If you are interested in joining the working group for this comment letter, please contact Jennifer.Wolfe@sfindustry.org

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