Futures brokers exempted from consumer arbitration rule
On July 10, the Consumer Financial Protection Bureau, a U.S. government agency created through DoddFrank, issued a final rule on pre-dispute arbitration agreements. The rule prohibits financial services companies such as banks and credit card companies from including class action waiver provisions in their consumer contracts. When the CFPB originally proposed the rule, it raised the possibility of applying it to futures commission merchants. In its final form, however, the rule includes a provision that exempts entities regulated by the CFTC. The exemption cites a letter filed by FIA in August 2016 that raised concerns about the impact of the rule on FCMs. The FIA letter noted that the CFTC has plenary jurisdiction over FCMs, that the CFTC already has rules governing arbitration agreements, and that it would be unduly burdensome for FCMs to comply with overlapping CFTC and CFPB rules.
