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March 10, 2015

By: Julia B. Strickland, Brian C. Frontino, Stephen J. Newman

On March 10, 2015, in a 700-page report and at a public field hearing, the Consumer Financial Protection Bureau made clear its intention to ban or severely limit class action waivers and pre-dispute arbitration agreements.
The Dodd-Frank Act requires CFPB to report to Congress on the effects of arbitration clauses in consumer financial agreements, and the statute empowers CFPB to prohibit or limit such clauses on a going-forward basis, following a formal rulemaking proceeding.  These actions indicate that CFPB intends to accelerate its pace toward issuing a formal rule.