On May 15, the CFPB published a Federal Register notice withdrawing its proposed rule regarding prohibited terms and conditions in agreements for consumer financial products or services under Regulation AA. The withdrawal stems from the CFPB’s re-evaluation of its policies and objectives, noting the new leadership’s view that the proposed rule largely duplicated the FTC’s Credit Practices Rule. The Bureau cited two main reasons for the withdrawal: the desire to limit regulations especially given purported duplication with the FTC’s rule; and comments which questioned the Bureau’s authority to adopt the proposed rule.
As previously covered by InfoBytes, this rule would have banned large banks and consumer finance companies from including in their contracts any provisions purporting to waive substantive consumer legal rights and protections (or their remedies) granted by state or federal law.
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