• The Proposed Rule will apply to agreements entered into after the rule’s effective date. When implemented, this rule will be a game-changer for nearly all consumer financial contracts. Affected companies should use this time, before implementation, to mitigate class action claims that previously might have been subject to arbitration. Companies should consider a review of all consumer-facing documents to confirm language complies with applicable federal and state law. Additionally, internal policies and procedures must be reviewed to ensure that product origination and servicing is consistent with all legal requirements. Likewise, vendor agreements must be reviewed in relation to applicable law—including, most importantly, principal-agency theories.

It is imperative that companies anticipate ways to limit liability and manage future class action risks now—as class action defense litigation spending is anticipated to surge in every consumer finance sector. Notably, this rule should be considered in the context of the CFPB’s pending rules related to the collection of certain creditrelated information linked to the commercial “small businesses” market as required by Section 1071 of the Dodd-Frank Act. The public comment period will close 90 days after publication of the Proposed Rule in the Federal Register. The CFPB has proposed that the final rule not be effective until 180 days after its publication. A preview is available here. The March 2015 CFPB Report regarding arbitration is available here. www.kattenlaw.com AUSTIN | CENTURY  CITY | CHARLOTTE | CHICAGO | HOUSTON | IRVING | LONDON | LOS  ANGELES | NEW  YORK | ORANGE  COUNTY | SAN  FRANCISCO  BAY  AREA | SHANGHAI | WASHINGTON,  DC Attorney advertising. Published as a source of information only.

The material contained herein is not to be construed as legal advice or opinion. ©2016 Katten Muchin Rosenman LLP. All rights reserved. Katten Muchin Rosenman LLP is an Illinois limited liability partnership including professional corporations that has elected to be governed by the Illinois Uniform Partnership Act (1997). London: Katten Muchin Rosenman UK LLP. 2 5/12/16 .