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U.S. agency to announce rule blocking mandatory consumer arbitration on Monday -sources
July 10, 2017 / 5:03 PM / 5 months ago

U.S. agency to announce rule blocking mandatory consumer arbitration on Monday -sources

WASHINGTON, July 10 (Reuters) - A U.S. consumer watchdog agency is expected on Monday to release a final rule blocking credit card companies, banks and other firms from forcing customers to agree to settle disputes only through arbitration as a condition of opening accounts, two people familiar with the matter told Reuters.

The Consumer Financial Protection Bureau (CFPB) is expected to face a tough political fight over the regulation, which would make it easier for customers to join class-action lawsuits. Many observers expect the Republican-led Congress to swiftly try to repeal it.

The CFPB released a draft of the rule more than a year ago, when former President Barack Obama, a Democrat, was still in office. The regulator said that class actions, where people band together to sue over the same alleged wrongdoing, would make lawsuits more affordable.

Many Republicans, including President Donald Trump, are skeptical of the CFPB as well as class actions, which they say waste time and money without helping possible victims of fraud.

The CFPB did not immediately respond to a request for comment. Sources spoke on the condition of anonymity because they were not authorized to publicly discuss the timing of the CFPB’s final rule. (Reporting by Lisa Lambert; Editing by Lauren Tara LaCapra and Phil Berlowitz)

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