Consumer Financial Protection Bureau Issues New Rule Banning Mandatory Arbitration Clauses

The Consumer Financial Protection Bureau, or CFPB, recently issued a new rule banning banks, credit card companies, and other financial firms from including mandatory arbitration clauses in consumer contracts. These clauses have been used by the banks to prevent consumers from going to court to redress any abuses or illegal action taken by the financial institutions. Wells Fargo used its forced arbitration clauses to attempt to thwart consumers' efforts to seek damages in court for Wells Fargo's opening of unauthorized accounts

In my practice as a consumer protection lawyer, I regularly see potential cases which I might otherwise take, but decline because of a mandatory arbitration clause. With this ban issued by the CFPB, more Arizona consumers will be in a position to assert their rights under the law in a court of law, rather than be forced to take their case to the less favorable venue of arbitration.