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Molly Calkins Speaks with Powersports Finance on Impact of CFPB Arbitration Rule
July 14, 2017
Molly Calkins discussed with Powersports Finance the outlook for revolving credit programs in powersports under the latest arbitration rule promulgated by the U.S. Consumer Financial Protection Bureau. The federal agency has barred credit card lenders from mandating arbitration clauses to prevent individuals from working together to file class actions.

"Industry participants have questioned and criticized the rule since it was first proposed in May 2016," Calkins told the publication. "For example, dealers have expressed concern that although not subject to the rule, they will feel a significant cost impact since indemnification clauses in dealer/lender contracts would obligate dealers to reimburse the lenders' cost of increased lawsuits. Credit unions, too, are concerned they may bear increased burden of class actions due to conduct on the part of dealers who contract with such credit unions for indirect auto lending."

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