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CFPB unleashes new arbitration rule

Joe Mont | July 11, 2017

One of the most controversial rules ever proposed by the Consumer Financial Protection Bureau—banning companies from using mandatory arbitration clauses—is now final.

Many consumer financial products like credit cards and bank accounts have arbitration clauses in their contracts that prevent consumers from filing class action lawsuits and require the use of arbitration.

"Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," CFPB Director Richard Cordray said in a statement. "These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can... To get the full story, subscribe now.