FOR IMMEDIATE RELEASE: Jan. 14, 2025

CONTACT: Carter Dougherty, carter@ourfinancialsecurity.org 

New Proposal Would Stop Companies from Contracting Away Fundamental Rights
CFPB rule would protect Constitutionally protected rights and free speech

Washington DC – The Consumer Financial Protection Bureau (CFPB) has proposed a rule that would make sure constitutionally protected rights are not eviscerated by abusive terms and conditions in consumer contracts. 

The CFPB’s proposal would prohibit financial companies from forcing consumers to surrender their fundamental rights in take-it-or-leave-it contracts that are used for everyday services such as bank accounts, credit cards, and payment apps on smart phones. 

“Today’s proposal demonstrates the CFPB’s commitment to stand up for people and prevent financial firms from duping customers into giving up their protected fundamental rights,” said Christine Chen Zinner, senior policy counsel for the Americans for Financial Reform Education Fund. “The financial marketplace is not truly free and competitive for consumers if they are forced into abusive terms and conditions that can be unilaterally modified by powerful corporations.”

Under the proposal, companies would be prohibited from unilaterally modifying any significant (“material”) contract terms and could not impose terms that limit someone’s speech about that company. Contract clauses that waive state laws and state consumer protections will also be prohibited, and state attorneys general will have the full authority to hold these companies accountable for violating this proposal.

In recent years, companies have become increasingly systematic about using abusive terms and conditions in consumer contracts, even when they violate state and federal laws. Companies have also unilaterally modified terms and conditions, to their benefit, in the middle of ongoing litigation, a practice that unfairly disadvantages consumers and does not enable a fair and level playing field . 

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