Week ending July 28, 2017
H. J. RES. 111 Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by Bureau of Consumer Financial Protection relating to “Arbitration Agreements”.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Bureau of Consumer Financial Protection relating to “Arbitration Agreements” (82 Fed. Reg. 33210 (July 19, 2017)), and such rule shall have no force or effect.
The rule being disapproved of states; Pursuant to section 1028(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau of Consumer Financial Protection (Bureau) is issuing this final rule to regulate arbitration agreements in contracts for specified consumer financial product and services.
First, the final rule prohibits covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action concerning the covered consumer financial product or service.
Second, the final rule requires covered providers that are involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau and also to submit specified court records. The Bureau is also adopting official interpretations to the regulation.
In the last few decades, companies have begun inserting arbitration agreements in a wide variety of standard-form contracts, such as in contracts between companies and consumers, employees, and investors. As is underscored by the range of comments received on the proposal, the use of arbitration agreements in such contracts has become a contentious legal and policy issue due to concerns about whether the effects of arbitration agreements are salient to consumers, whether arbitration has proved to be a fair and efficient dispute resolution mechanism, and whether arbitration agreements effectively discourage and limit the filing or resolution of certain claims in court or in arbitration.
In recent years, Congress has taken steps to restrict the use of arbitration agreements in connection with certain consumer financial products and services and other consumer and investor relationships.
Most recently, in the 2010 Dodd-Frank Act, Congress prohibited the use of arbitration agreements in connection with mortgage loans,\11\ authorized the Securities and Exchange Commission (SEC) to regulate arbitration agreements in contracts between consumers and securities broker-dealers and investment advisers,\12\ and prohibited the use of arbitration agreements in connection with certain whistleblower proceedings.
(Full text of H.J.Res. 111 at congress.gov)
Status: Passed House /
VOTES and FLOOR ACTION
On Passage: On passage Passed by recorded vote: 231 – 190 (Roll no. 412).
Motion to recommit:
Text of the motion:
COST AND IMPACT
Cost to the taxpayers: Data not available
Pay-as-you-go requirements: Data not available
Regulatory and Other Impact: Data not available
Dynamic Scoring: Data not available
Tax Complexity: Not applicable to this bill.
Earmark Certification: Data not available
Duplication of programs: Data not available
Direct Rule-Making: Data not available
Advisory Committee Statement: Data not available
Budget Authority: Data not available
Constitutional Authority: Assumed.
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