Linda enters into a contract for a credit card sponsored by Max'dOut Inc. The sponsor provides the contract, which contains an arbitration clause. This clause requires that any dispute must be submitted to private arbitration and prohibits class-action litigation. Under new rules sought by the Consumer Financial Protection Bureau, such clauses would be
A) prohibited.
B) favored in contracts for credit cards and other financial products.
C) favored in all consumer contracts.
D) favored for all disputes involving relatively small sums.

Question

Linda enters into a contract for a credit card sponsored by Max'dOut Inc. The sponsor provides the contract, which contains an arbitration clause. This clause requires that any dispute must be submitted to private arbitration and prohibits class-action litigation. Under new rules sought by the Consumer Financial Protection Bureau, such clauses would be​
A) ​prohibited.
B) ​favored in contracts for credit cards and other financial products.
C) ​favored in all consumer contracts.
D) ​favored for all disputes involving relatively small sums.

Quizplus · Accepted Answer

The new rules sought by the Consumer Financial Protection Bureau would prohibit arbitration clauses that require disputes to be submitted to private arbitration and prohibit class-action litigation in all consumer contracts, including credit card contracts.

Linda Enters into a Contract for a Credit Card Sponsored