The Consumer Financial Protection Bureau is considering rules that would effectively overrule the Supreme Court’s decisions in Concepcion and Italian Colors, and prohibit consumer financial services companies from using class-action waivers in their arbitration agreements.

Alan Kaplinsky testified on behalf of the industry at a field hearing attended by industry stakeholders at which the bureau presented an outline of its proposed arbitration rules. A Small Business Review Panel was then convened by the bureau to solicit feedback from small industry stakeholders that could be affected by the proposed rules, should they become final.

Mr. Kaplinsky and Mark Levin co-authored an expert analysis commentary on the issue that was published in the Consumer Financial Services Law Report. Their view was that CFPB’s proposed rules exposed at the hearing—while they would not ban consumer arbitration clauses in their entirety—generally would prohibit companies from including arbitration clauses that block class action lawsuits in their consumer contracts for everything from credit cards to certain auto loans, among many others.

The authors conclude that “enhancing consumer education about arbitration would be far more beneficial to consumers than depriving them of arbitration as a means of resolving disputes.”