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September 21, 2016

Congressmen ask CFPB to add ‘Safe Harbour’ provision for financial companies in final anti-arbitration rules

Two members of Congress have asked the Consumer Financial Protection Bureau (CFPB) to add a “safe harbor provision” in its final anti-arbitration rules that would allow financial companies to retain class action waivers in their arbitration clauses, reports Legal Newsline.

“Many observers have concluded that a prohibition on class action waivers will result in financial institutions dissolving their consumer-friendly arbitration programs as they are forced to bear significantly increased exposure associated with class action litigation,” wrote U.S. Reps. Randy Neugebauer (R-TX) chair of the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit, and William Lacy Clay Jr. (D-MO), the subcommittee’s ranking member, in a letter to CFPB Director Richard Cordray.

“Such an outcome would leave many American consumers seeking to remedy small dollar disputes without a viable forum for resolution,” they wrote.

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