How Banks Are Trying to Contain Cost of CFPB's Arbitration Plan

Eric Mogilnicki is quoted in an American Banker article regarding the ways banks, credit card companies, and other financial firms may react to a CFPB proposal to limit the use of arbitration clauses. Mogilnicki, who expects transition issues as companies try to preserve old clauses, says, “There may be a flood of arbitration clauses added to contracts just before the rule takes effect.” He continues, “Then after the rule, there will be two classes of people – those with arbitration clauses and those with none. And the same courts that have been hostile to arbitration in the past may seek to ignore these valid arbitration clauses.”