Consumers in Texas will soon find it easier to file lawsuits against banks or credit card companies as part of large, class legal actions. The Consumer Financial Protection Bureau issued a new rule on July 10 that stops these consumer finance corporations from using arbitration clauses to prevent such lawsuits.
The use of the clauses require individuals to pursue any legal action alone. They mandate that any disputes must be handled in private mediation actions rather than in a public court case, which eliminates the potential of a class-action suit. The CFPB rule aims to allow consumers who suffer joint harms to be part of collective actions in the courtroom.