Alan S. Kaplinsky, leader of the Consumer Financial Services Group for the firm Ballard Spahr LLP, recently told Legal Newsline that there is “perhaps an 80 percent” chance the bureau will issue a final rule before Jan. 20 on a proposed set of rules prohibiting arbitration clauses that prevent class action lawsuits.
While the CFPB has not indicated publicly that the presidential change-over is its deadline, Kaplinsky said the rumors are “rampant.”
“The proposed arbitration rule is very simple (unlike the proposed small-dollar loan rule),” he pointed out. “The Obama Administration is encouraging all executive agencies to complete as many rules as possible before January 20.”
Republicans maintain control of both the U.S. House of Representatives and U.S. Senate as a result of the November elections, which could come in to play.
Kaplinsky has been a vocal opponent of the CFPB’s proposed set of rules even before they were officially released by the bureau.
Last November, Kaplinsky took issue with a New York Times article that alleged binding arbitration is being used by Wall Street and corporate America to hurt American consumers. He argues class actions only benefit class action lawyers.
Under the CFPB’s proposal, companies would be prohibited from putting mandatory arbitration clauses in new contracts. Class action waivers are sections of a contract that prevent someone from filing a class action lawsuit and can be found in many different types of contracts, including employment contracts.