AILA Members and Friends: I think you will find the following message from AFSA regarding arbitration to be of interest. Maury
AFSA (American Financial Services Association) Email dated July 6, 2017
The Consumer Financial Protection Bureau (CFPB) is continuing its efforts to finalize an arbitration rule, as well as a small-dollar loan rule.
AFSA expects the CFPB to issue a final rule prohibiting the use of class action waivers in arbitration clauses very soon. The final rule is likely to be similar to the one that was proposed in May of 2016. AFSA anticipates that financial institutions will have around seven months to come into compliance with the final rule.
AFSA is working with its sister trade associations on a response to the final rule, which includes discussions with members of Congress about using the Congressional Review Act (CRA) to overturn it. As a reminder, regulations can be overturned by simple majority vote and the president’s signature. Industry is working with Congressional leaders to garner the 51 votes needed for Senate passage. The trade associations are also discussing potential litigation challenging the rule.
The CFPB is also working to finalize the small-dollar loan rule. AFSA expects a final rule by this fall. The proposed small-dollar loan rule had an effective date of 15 months. AFSA continues to advocate for a narrower scope for the rule.
If there is a new CFPB director, the effective dates of either rule could be moved, the rules could be altered, or the rules could be withdrawn.
For questions or comments, please contact AFSA EVP Bill Himpler via email or at 202-466-8616.
