CFPB Proposed New Rule to Establish Public Registry of “Take It Or Leave It” Contract Terms and Conditions

On January 11, 2023, the Consumer Financial Protection Bureau (CFPB) proposed a new rule to apparently shed light on the dark corners of the financial industry. The proposed rule would create a public registry of the fine print in the contracts offered by non-bank companies that fall under CFPB’s supervisory jurisdiction. These contracts, often referred to as “take it or leave it” agreements, contain terms and conditions that attempt to waive or limit consumers’ legal rights and protections.

Many contracts with consumers are non-negotiable form contracts, which can mislead consumers into thinking that the terms or conditions are legally enforceable. But, under the proposed rule, non-banks will be required to submit information on the terms and conditions in these form contracts that seek to waive or limit individuals’ rights and other legal protections. This information will be made publicly available in a registry that will be open to the public, including other consumer financial protection enforcers.

“Some companies seek to censor their customers and strip them of their rights by inserting fine print into non-negotiable contracts,” said CFPB Director Rohit Chopra. “The CFPB is proposing a registry of these contract clauses to find out where people are unable to speak up when they’ve been harmed.”

The proposed registry would include examples of terms and conditions such as:

  • Waivers of legal protections for servicemembers, like the Military Lending Act (MLA) and the Servicemembers Civil Relief Act (SCRA)
  • Credit reporting terms that undermine consumers’ rights to legal action and class action lawsuits
  • Limitations on lender liability for bank fees caused by repeated debit attempts
  • Unenforceable waivers in mortgage contracts that mislead consumers

With this proposed rule, the CFPB aims to hold non-banks accountable for the contracts they offer to consumers, and empower individuals to make informed decisions about the financial products and services they use in their daily lives.

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