William Molinski Reflects on Consumer Financial Protection Bureau's Proposal to Prohibit Financial Institutions from Using Arbitration Provisions to Block Class Actions

Bill Molinski, global head of Orrick's Commercial Litigation Group and a partner in its Los Angeles office, recently spoke to The Recorder about the Consumer Financial Protection Bureau's (CFPB) announcement that it intends to prohibit banks, credit card companies and other financial institutions from employing arbitration clauses to block class actions. The CFPB is currently soliciting the business community's input on the proposed rules, which would require that arbitration provisions explicitly state that they are inapplicable "to cases filed as class actions unless and until the class certification is denied by the court or the class claims are dismissed in court."  According to Bill, if enacted, the rule "will open the floodgates to frivolous class actions once again."