A rule proposed by the Consumer Financial Protection Bureau (“CFPB”) aims to establish a public registry of terms and conditions used by supervised nonbanks that waive or limit consumer rights in non-negotiable form contracts.
The rule would require supervised nonbanks to submit information on terms and conditions in so-called “take it or leave it” form contracts that seek to waive or limit individuals’ rights and other legal protections. These terms and conditions would then be posted in a registry accessible to the public. The registry would assist the CFPB in assessing the impact of the terms and conditions on the adequacy of applicable legal protections as well as determining consumer understanding of covered terms and conditions included in form contracts.
In the CFPB’s announcement, they specifically called out mortgage lenders for using waivers and limitations that are inconsistent with the Truth in Lending Act such as requiring borrowers to agree to arbitration in the event of a dispute or to waive rights such as the right of rescission or the right to receive certain disclosures within a specified timeframe.
To review the proposed rule, please visit CFPB Proposed Rule - Registry of Supervised Nonbanks that Use Form Contracts to Impose Terms and Conditions that Seek to Waive or Limit Consumer Legal Protection
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