CFPB Director Richard Cordray has published a response to recent criticisms of the Bureau’s arbitration rule, which stops consumer finance companies from using arbitration agreements to block consumers from joining together to seek relief for industry wrongdoing.
CFPB proposes prohibiting mandatory arbitration clauses that deny groups of consumers their day in court
Today, we are proposing rules that would prohibit mandatory arbitration clauses that deny groups of consumers their day in court. Our proposal is designed to protect consumers’ right to pursue justice and relief and deter companies from violating the law.
Buried in many contracts for consumer financial products are arbitration clauses that block consumers from seeking relief through class action lawsuits. Today, we’re releasing proposals under consideration that would stop companies from using these clauses to avoid accountability to their customers.
We’re proposing new disclosure requirements that consumers would receive before deciding to open a prepaid account. Currently, each prepaid card company’s retail package discloses different information in different ways. This can be confusing if you’re trying to compare costs between prepaid accounts. Learn more about how we’re making it easier to compare options.
We’re developing new disclosures that will provide a variety of protections for prepaid card users. As a part of this work, we’re developing a model disclosure form to standardize these disclosures and clearly present the most important fees so you can easily identify the best prepaid card for your needs. Take a look, and tell us what you think about the model forms.