Legislative Background on Mandatory Arbitration
Recent Action by Congress on the CFPB Rule
The Federal Arbitration Act (FAA), which Congress passed in 1925, established rules for the use of arbitation in private contracts, providing a way for businesses and indiviudals to resolve disputes outside the courts. After that, there was no significant effort by the Federal Government to change the legal status of arbitration agreements until July 2017, when the Consumer Financial Protection Bureau (CFPB) issued a rule limiting their use in some consumer financial products and services contracts. Court Actions By strengthening the legal status of arbitation clauses, and deeming arbitration a satisfactory option for those who wished to avoid the time…
