The Consumer Financial Protection Bureau (CFPB) is moving forward on plans to ban companies from including arbitration clauses that block class action lawsuits in their consumer financial products contracts.
Should the rule proposal become final, companies that focus on consumer financial products should expect to see a rise in class-action litigation.
The Dodd-Frank Act ordered the CFPB to study the use of arbitration clauses in consumer financial products and authorized the agency to issue regulations consistent with the study’s findings. In March, the CFPB published its findings, which included the conclusion that arbitration clauses restrict consumers’ relief for disputes with financial service providers by allowing companies to block group lawsuits.
Earlier this month, the CFPB outlined several regulatory proposals that it plans to submit to a Small Business Review Panel. This is the first step in the rulemaking process, which will likely take several years to complete. The new rules are also expected to be forward-looking and will not apply to existing contracts.
Most notably, the proposed rules would prohibit class action waivers in contracts for consumer financial products and services, including credit cards, checking and deposit accounts, prepaid cards, money transfer services, certain auto loans, auto title loans, small dollar or payday loans, private student loans, and installment loans. According CFPB Director Richard Cordray, arbitration clauses that block class-action litigation operate as a “free pass that prevents consumers from holding their financial providers directly accountable for the harm they cause when they violate the law.”
In good news for businesses, the CFPB proposals under consideration not to completely ban arbitration clauses. However, such clauses would have to explicitly state that they do not apply to cases filed as class actions unless and until the class certification is denied by the court or the class claims are dismissed in court. In addition, businesses that choose to use arbitration clauses for individual disputes must submit to the CFPB the arbitration claims filed and awards issued. According to the CFPB, the information provided would enable the CFPB to better understand and monitor arbitration cases.
Scarinci Hollenbeck Attorneys Named to New Jersey Super Lawyers 2026
Scarinci Hollenbeck Attorneys Named to New Jersey Super Lawyers 2026 and Rising Stars Lists Scarinci Hollenbeck is pleased to announce that several of its attorneys have been selected for inclusion in the New Jersey Super Lawyers 2026 and Rising Stars lists. The annual recognition highlights attorneys who have attained a high degree of peer recognition […]
Donald M. Pepe and Donald Scarinci Named to 2026 ROI-NJ Influencers: Law List
ROI-NJ Continues to Feature Donald Scarinci and Donald M. Pepe on Annual Influencers in Law List Donald M. Pepe and Donald Scarinci of Scarinci Hollenbeck have once again been named to ROI-NJ’s 2026 Influencers: Law List, recognizing attorneys who continue to shape New Jersey’s legal and business landscape. The annual list highlights legal professionals whose […]
Monmouth Bar Golden Gala Honors Two Scarinci Hollenbeck Attorneys
Scarinci Hollenbeck is proud to share that two highly acclaimed retired judges who now serve as Of Counsel to the firm, Hon. Ira E. Kreizman, J.S.C. and Hon. Ronald Lee Reisner, J.S.C., will be honored at the Monmouth Bar Association’s Golden Gala. The event recognizes members of the Monmouth Bar Association who have practiced law […]
NJ Real Estate Attorney Joe DeMarco Named in 2026 NJBIZ Leaders in Law List
Scarinci Hollenbeck is pleased to announce that NJ Real Estate Partner, Joe DeMarco, has been named a 2026 Leaders in Law Award Honoree by NJBIZ in the Real Estate: Construction, Environmental, Leasing category. The NJBIZ Leaders in Law program recognizes attorneys and general counsels whose professional accomplishments, leadership, and service to their communities demonstrate a […]
John M. Scagnelli Re-Elected to LSRPA Board of Trustees
Scarinci Hollenbeck is pleased to announce that Partner John M. Scagnelli has been re-elected to serve on the Board of Trustees of the Licensed Site Remediation Professionals Association (LSRPA) for an additional two-year term. LSRPA is the statewide professional organization representing New Jersey’s Licensed Site Remediation Professionals (LSRPs), playing a central role in advancing environmental […]
Robert E. Levy Re-Certified as Civil Trial Attorney by the Supreme Court of New Jersey
Scarinci Hollenbeck is pleased to announce that Robert E. Levy has been re-certified as a Certified Civil Trial Attorney by the Supreme Court of New Jersey. This re-certification, combined with Levy’s existing designation as a Certified Criminal Trial Attorney, places him among less than one percent of all certified attorneys in New Jersey to hold […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
