Understanding the New Consumer Financial Protection Bureau Rule on Arbitration and Class Actions
The Consumer Protection Financial Bureau just adopted a new rule affecting class action clauses and mandatory arbitration. The new rule prohibits class action bans in arbitration clauses by financial service firms in consumer contracts and requires reporting of results of individual arbitrations. Arbitration and class action bans appear in most consumer contracts for services such as credit cards, banking, car loans, internet providers and cell phones but most consumers do not realize the impact or even the existence of these clauses in contracts.
