CFPB Proposes Rule Targeting Consumer Financial Contracts

Adam Witmer
Regulatory Update

On January 14, 2025, the CFPB proposed a rule under Regulation AA that would prohibit certain contractual provisions in agreements for consumer financial products or services. The proposed rule aims to address coercive and restrictive clauses in consumer financial contracts. 

In particular, the CFPB’s proposed rule would:

  • Prohibit covered persons 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;

  • Prohibit contract terms that limit free expression, including with threats of account closure, fines, or breach of contract claims, as well as other contract terms; and

  • Codify certain longstanding prohibitions under the Federal Trade Commission's (FTC) Credit Practices Rule.

The CFPB will receive comments on all aspects of the proposal until April 1, 2025.

The Proposed Rule can be found here.

Adam Witmer
Regulatory Update
Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

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