On October 7, the Consumer Financial Protection Bureau (“CFPB”) proposed a ban on class action waivers in consumer financial products and services contracts. Pending review by a Small Business Review Panel, the ban would potentially take effect in 2018, resulting in increased class action litigation against financial institutions. The proposal does, however, preserve mandatory pre-dispute arbitration clauses for individuals. Bank and nonbank lenders should be aware of the CFPB’s proposal and what it will mean for them going forward.
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