Arbitration Fairness for Consumers Act

To amend the Consumer Financial Protection Act of 2010 with respect to arbitration. 1. Short title This Act may be cited as the Arbitration Fairness for Consumers Act 2. Purposes The purposes of this Act are to— (1) prohibit predispute arbitration agreements that force arbitration of future consumer financial product or service dispute; and (2) prohibit agreements and practices that interfere with the right of individuals and small businesses to participate in a joint, class, or collective action related to a consumer financial product or service dispute. 3. No validity or enforceability of predispute arbitration agreements or joint-action waivers (a) In general Subtitle C of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5531 15 U.S.C. 5536 1036A. No validity or enforceability of predispute arbitration agreements or joint-action waivers (a) Definitions In this section: (1) Class action The term class action (2) Consumer dispute The term consumer dispute (A) an individual, including an individual who seeks certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law, who for personal, family, or household purposes, seeks or acquires— (i) real or personal property; (ii) services, including services related to digital technology; (iii) securities or other investments; (iv) money; or (v) credit; and (B) the seller or provider of such property, services, securities or other investments, money, or credit, including a third party involved in the selling, providing of, payment for, receipt or use of information about, or other relationship to any such property, services, securities or other investments, money, or credit. (3) Predispute arbitration agreement The term predispute arbitration agreement (4) Pre-dispute joint-action waiver The term pre-dispute joint-action waiver (b) No validity or enforceability of predispute arbitration agreements or joint-Action waivers (1) In general Notwithstanding any other provision of law, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a consumer dispute between a covered person and a consumer that relates to a consumer financial product or service. (2) Applicability An issue as to whether this section applies with respect to a dispute shall be determined under Federal law. The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to which this section applies shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing the agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator. . (b) Technical and conforming amendments The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act is amended by inserting after the item relating to section 1036 the following: 1036A. No validity or enforceability of predispute arbitration agreements or joint-action waivers. . 4. Applicability This Act, and the amendments made by this Act, shall apply with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.

Summary: Arbitration Fairness for Consumers Act This bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of a dispute related to a consumer financial product or service.