The Consumer Financial Protection Bureau's plan to restrict the use of mandatory arbitration clauses is likely to be scuttled by Congress, the incoming Trump administration or an industry lawsuit, according to a National Mortgage News commentary today. While the future of the agency and its director are both up in the air, many are now focused on its efforts to finalize the arbitration plan, which the industry fiercely opposes. There are multiple ways that GOP policymakers and the industry could target the rule, leaving many observers to conclude that at least one will work, according to the commentary. For starters, President-elect Donald Trump could attempt to fire CFPB Director Richard Cordray, likely igniting a protracted legal fight that may ultimately kill the arbitration plan. "A new CFPB director will be installed and one of the first decisions will be to rescind regulation banning mandatory arbitration clauses in consumer financial contracts," said Jason Johnston, a law professor at the University of Virginia School of Law.
