111 S3755 IS: Arbitration Fairness for Consumers Act U.S. Senate 2022-03-03 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

II117th CONGRESS2d SessionS. 3755IN THE SENATE OF THE UNITED STATESMarch 3, 2022Mr. Brown (for himself, Mr. Schatz, Mr. Warnock, Ms. Warren, Mr. Menendez, Mr. Van Hollen, Mrs. Feinstein, Mr. Sanders, Mr. Markey, Mr. Reed, Mr. Blumenthal, Mr. Padilla, Mr. Wyden, Mr. Whitehouse, Ms. Hirono, Ms. Klobuchar, Ms. Cortez Masto, Mr. Durbin, Mr. Booker, Mr. Casey, and Mrs. Gillibrand) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban AffairsA BILLTo amend the Consumer Financial Protection Act of 2010 with respect to arbitration.

1.

Short title

This Act may be cited as the Arbitration Fairness for Consumers Act.

2.

Purposes

The purposes of this Act are to—(1)prohibit predispute arbitration agreements that force arbitration of a future consumer financial product or service dispute; and(2)prohibit agreements and practices that interfere with the right of consumers to participate in a joint, class, or collective action related to a consumer financial product or service dispute.

3.

No validity or enforceability of predispute arbitration agreements or joint-action waivers

(a)

In general

Subtitle C of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5531 et seq.) is amended by inserting after section 1036 (12 U.S.C. 5536) the following:

1036A.

No validity or enforceability of predispute arbitration agreements or joint-action waivers

(a)

Definitions

In this section:(1)

Class action

The term class action means a lawsuit in which 1 or more parties seek or obtain class treatment pursuant to rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law.(2)

Consumer dispute

The term consumer dispute means a dispute relating to a consumer financial product or service between—(A)a consumer, including a consumer who seeks certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law; and(B)a covered person.(3)

Predispute arbitration agreement

The term predispute arbitration agreement means an agreement to arbitrate a consumer dispute that has not yet arisen at the time of the making of the agreement.(4)

Predispute joint-action waiver

The term predispute joint-action waiver means an agreement, whether or not part of a predispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a consumer dispute that has not yet arisen at the time of the making of the agreement.(b)

No validity or enforceability of predispute arbitration agreements or joint-Action waivers

(1)

In general

Notwithstanding any other provision of law, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to a consumer dispute.(2)

Applicability

(A)

In general

An issue as to whether this section applies with respect to a consumer dispute shall be determined under Federal law. (B)

Determination

The applicability of this section to an agreement to arbitrate and the validity and enforceability of an agreement to which this section applies shall be determined by a court, rather than an arbitrator, irrespective of—(i)whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing the agreement; and(ii)whether the agreement purports to delegate such determinations to an arbitrator.

.(b)

Technical and conforming amendments

The table of contents for the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111–203; 124 Stat. 1376) is amended by inserting after the item relating to section 1036 the following: Sec. 1036A. No validity or enforceability of predispute arbitration agreements or joint-action waivers..

4.

Applicability

This Act, and the amendments made by this Act, shall apply with respect to any consumer dispute or claim that arises or accrues on or after the date of enactment of this Act.