The CFPB would be prohibited from issuing final regulations governing mandatory arbitration agreements until it meets unspecified conditions, according to a proposed FY2017 spending measure.

The House Financial Services Appropriations Subcommittee will mark up its bill Wednesday to fund the CFPB, the Treasury Department and the White House, among other federal offices and agencies.

The draft bill stated that final arbitration rules cannot be issued until the CFPB meets certain requirements in the Appropriations Committee report on the bill. That report is unlikely to be available until the full Appropriations Committee marks up the bill.

Even then, the House bill is simply the first step in the appropriations process.

Earlier this month, the CFPB released proposed rules governing mandatory arbitration clauses found in many contracts.

The agency said such clauses in contracts prevent consumers – including credit union members – from joining together in a suit to accuse financial institutions of wrongdoing.

The proposal does not prohibit arbitration clauses, but it specifies the language that may be used in clauses and emphasizes the fact that consumers can file suit.

Critics of the CFPB have alleged that a study the agency was required to conduct before issuing the rules was poorly conducted and did not meet the statutory requirements of the Dodd-Frank Act.

In addition to delaying the rules, the appropriations measure calls for the CFPB to be governed by a board rather than the director of the agency. That has been proposed in the past, but has never been enacted into law.

Instant Insights /

House Bill Would Delay CFPB Arbitration Rules

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