Michael Best Partner Joe Olson was quoted in the Bloomberg BNA article "CFPB Plans May 5 Hearing on Arbitration; Expected to Propose Rule" on April 22, 2016.
A long-awaited proposal on the use of arbitration agreements in certain consumer financial services contracts is likely to be released by the Consumer Financial Protection Bureau (CFPB) on May 5 when it holds a field hearing, agency watchers said.
The CFPB announced last October it is considering rules that would ban banks and other financial companies from using “free pass” arbitration clauses to block consumers from suing in groups to obtain relief . The hearing in Albuquerque, N.M., will feature remarks from agency Director Richard Cordray and testimony from consumer groups, industry representatives and members of the public, according to a CFPB notice.
“Because the Bureau usually combines field hearings with announcements of related developments, it is likely to announce its proposed arbitration rules that day,” Jeff Sovern, a professor at St. John's University School of Law, wrote in the Consumer Law & Policy Blog sponsored by the Public Citizen litigation group.
Restricting Class Actions Waivers
Joe Olson, a partner with Michael Best & Friedrich LLP in Milwaukee, told Bloomberg BNA in an e-mail he anticipates the CFPB will release a proposed rule limiting or prohibiting class-action waivers in arbitration clauses. He said the CFPB has a history of using field hearings as a vehicle for announcing new developments.
“If they release a proposed rule, I suspect it will be in what the CFPB believes is final or near final form,” Olson said. “That would mean a final rule would most likely become effective sometime after the summer of 2017.”
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