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Title 12, Banks and BankingRelease 119-110

§5518 Authority to Restrict Mandatory Pre-dispute Arbitration

Title 12 › CHAPTER 53 — WALL STREET REFORM AND CONSUMER PROTECTION › SUBCHAPTER V — BUREAU OF CONSUMER FINANCIAL PROTECTION › Part B — General Powers of the Bureau › § 5518

Last updated Sep 22, 2026|Official source

Summary

The Bureau must study and report to Congress on how agreements that force consumers to agree to arbitration before any dispute arises are used in consumer financial products and services. The Bureau may make rules to ban or limit those mandatory pre-dispute arbitration agreements if it finds doing so is in the public interest and protects consumers, and the rule’s reasons must match the study. The Bureau cannot use this power to stop a consumer from voluntarily choosing arbitration after a dispute has started. Any rule will apply only to agreements made after the 180-day period that begins on the rule’s effective date.

Full Legal Text

Title 12, §5518

Banks and Banking, Source: USLM XML via OLRC

(a)Study and report
The Bureau shall conduct a study of, and shall provide a report to Congress concerning, the use of agreements providing for arbitration of any future dispute between covered persons and consumers in connection with the offering or providing of consumer financial products or services.
(b)Further authority
The Bureau, by regulation, may prohibit or impose conditions or limitations on the use of an agreement between a covered person and a consumer for a consumer financial product or service providing for arbitration of any future dispute between the parties, if the Bureau finds that such a prohibition or imposition of conditions or limitations is in the public interest and for the protection of consumers. The findings in such rule shall be consistent with the study conducted under subsection (a).
(c)Limitation
The authority described in subsection (b) may not be construed to prohibit or restrict a consumer from entering into a voluntary arbitration agreement with a covered person after a dispute has arisen.
(d)Effective date
Notwithstanding any other provision of law, any regulation prescribed by the Bureau under subsection (b) shall apply, consistent with the terms of the regulation, to any agreement between a consumer and a covered person entered into after the end of the 180-day period beginning on the effective date of the regulation, as established by the Bureau.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on the designated transfer date, see section 1029A of Pub. L. 111–203, set out as a note under section 5511 of this title.

Reference

Citations & Metadata

Citation

12 U.S.C. § 5518

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110