Congress Quashes CFPB Arbitration Rule: What Next?
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Pencils down. (Is the modern equivalent “cursors down”?) All the attorneys who were drafting new form consumer agreements to comply with the CFPB ruleprohibiting class action waivers can now trash those documents. Pursuant to the Congressional Review Act, the Senate voted 51-50 last night (with the VP as tie-breaker) to nullify the CFPB’s rule. (The House of Representatives had cast a similar vote earlier this summer.) And President Trump has signaled he will sign the bill. But you already know all that. The news came out last night.
So, what’s next?
What about those who are happy with this outcome, what’s next for them? I predict more companies will make use of class action waivers. In the last few years, with the proposed (and then actual) rule-making by various agencies, any move to add a class action waiver carried with it some risk that it would be soon made ineffective. But now, the Supreme Court and its conservative majority are firmly in favor of enforcing those class action waivers. And the federal agencies are also supportive of class action waivers. So, some of those companies who were kept on the fence by administrative action are likely to jump off and land on the side of adding class action waivers to their arbitration agreements.
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