CFPB Tackles Mandatory Arbitration, Auto-Agree Contracts

Intensifying its scrutiny of nonbanks, the CFPB today proposed a rule establishing a public registry of supervised nonbanks’ terms and conditions in “take it or leave it” form contracts for consumer financial products and services.  This initiative follows the Bureau’s proposal for an overall registry of nonbank retail-finance companies and – like it – it is not only problematic for these entities, but likely also precedent setting for bank providers.  FedFin will shortly provide clients with an in-depth analysis of the proposal, which targets contracts the Bureau believes require a consumer to waive legal protections (including those mandating arbitration), limit consumer rights, or restrict consumer complaints or reviews.