H.J.Res. 111 would disapprove and nullify the rule issued by the Bureau of Consumer Protection (CFPB) on July 10, 2017, regarding final arbitration pertaining to consumer finance contracts.

The Congressional Review Act, enacted in 1996, establishes special congressional procedures for disapproving a broad range of regulatory actions issued by federal agencies. If Congress passes a joint resolution disapproving the rule, and the resolution becomes law, the rule cannot take effect or continue in effect. The agency also may not reissue that rule or any substantially similar rule, except under authority of a subsequently enacted law.

The CFPB’s final rule prohibits consumer finance companies from relying on class action waivers to block class action lawsuits, prohibits the inclusion of class act lawsuit waiver provisions in contracts pertaining to a broad swath of consumer products and services, or “covered products and services”, and requires covered providers to not only alter their form agreements, but to submit arbitration-related court and arbitration filings to the CFPB for watchdog purposes.

The types of consumer financial products or services this would apply to includes: extensions of credit and participating credit decisions; providing accounts and remittance transfers subject to the Electronic Funds Transfer Act; auto-leasing and brokering of auto leases; providing accounts subject to the Truth in Savings Act; debt management, settlement, and repair; credit report remediation; consumer report providers; check cashing; debt collectors; broker-dealers and investment advisors; employers; entities regulated by the Securities Exchange Commission, the Commodity Future Trading Commission, or a state securities commission; Federal agencies, states, and tribes; entities and affiliates that provide covered services to less than 25 consumers; and merchants and retailers of nonfinancial goods that fall outside the CFPB’s authority.

Arbitration is an alternative method of dispute resolution that allows disputing parties to avoid court proceedings. As a general concept, arbitration is an agreement between two contracting parties to submit to the authority of an arbitrating entity. Parties may agree to arbitration after encountering a disagreement about contractual duties during performance, or they may agree to pre-dispute arbitration as a condition of the agreement formation. Unlike mediation, the decision of an arbitrator is usually final and binding to both parties.

Source: Republican Policy Committee