Analysis of the CFPB Arbitration Rule
Treasury Department Response
Nearly a century ago, Congress made private agreements to resolve disputes through arbitration “valid, irrevocable, and enforceable” under the Federal Arbitration Act. This longstanding Federal policy in favor of private dispute resolution serves the twin purposes of economic efficiency and freedom of contract. In the Dodd–Frank Act, Congress authorized the Consumer Financial Protection Bureau to limit or ban the use of arbitration agreements in consumer financial contracts only if the Bureau concludes that its restrictions are “in the public interest and for the protection of consumers.” Against this background, in July 2017, the Bureau issued its final rule prohibiting consumers…
