Title: Arbitration Fairness for Consumers Act
Policy area: Law

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 630 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 630

To amend the Consumer Financial Protection Act of 2010 with respect to 
                              arbitration.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 28, 2019

   Mr. Brown introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Consumer Financial Protection Act of 2010 with respect to 
                              arbitration.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Arbitration Fairness for Consumers 
Act''.

SEC. 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.

SEC. 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 et seq.) is amended by inserting after 
section 1036 (15 U.S.C. 5536) the following:

``SEC. 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' means a 
        lawsuit in which 1 or more parties seek or obtain class 
        treatment pursuant to rule 23 of the Federal Rules of Civil 
        Procedure or comparable rule or provision of State law.
            ``(2) Consumer dispute.--The term `consumer dispute' means 
        a dispute between--
                    ``(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' means an agreement to 
        arbitrate a dispute that has not yet arisen at the time of the 
        making of the agreement.
            ``(4) Pre-dispute joint-action waiver.--The term `pre-
        dispute joint-action waiver' means an agreement, whether or not 
        part of a predispute arbitration agreement, that would 
        prohibit, or waive the right of, one of the parties to the 
        agreement to participate in a joint, class, or collective 
        action in a judicial, arbitral, administrative, or other forum, 
        concerning a dispute that has not yet arisen at the time of the 
        making of the agreement.
    ``(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.''.

SEC. 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.
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