Last week, the CFPB announced two proposals related to the inclusion clauses that require arbitration to resolve all future disputes (“pre-dispute arbitration agreements”) in consumer financial products. The first proposal would effectively ban pre-dispute arbitration agreements that prohibit disputes brought by a class or other group of individuals. The second proposal would require
Can the CFPB Really Prohibit Pre-Dispute Arbitration Agreements?
Section 1028 of the Dodd-Frank Act, entitled “Authority to Restrict Mandatory Pre-Dispute Arbitration,” gives the CFPB the authority to promulgate regulations imposing conditions, limitations, or outright prohibitions on mandatory pre-dispute arbitration agreements relating to “consumer financial products or services. However, can Congress truly give the CFPB this authority?
Under Section 1028(a), the CFPB