CFPB Taking on Consumer Arbitrations

A couple of weeks ago, US Senator Thom Tillis (of the Senate Banking Committee) and US Congressman Andy Barr (Chair of the House Financial Services Subcommittee on Financial Institutions and Monetary Policy) submitted written opposition to the Consumer Financial Protection Bureau’s entertaining a petition calling for the ban of pre-dispute consumer arbitration agreements. 

 The petition was submitted in 2023 by several consumer advocate groups and asked for such ban, preferring, instead, that there be a choice, by the consumer, between arbitration and litigation.  Tillis and Barr argue that the CFPB would be violating federal law if such a ban were put in place.

 The Congressional Review Act provides that a rule may not be issued in “substantially the same form” as a previously rejected rule, Tillis and Barr point out.  They further point out that the CFPB’s prior attempt to restrain arbitrations by rulemaking was rejected and this is simply more of the same. 

 It will be interesting to watch this play out over time. 

To read the original petition, click here. To read the Tillis-Barr letter, click here.