The chorus of congressional voices calling for credit union regulatory relief grew louder this week with a letter to the Consumer Financial Protection Bureau (CFPB) regarding the agency’s proposed rule on arbitration.
Signed by 36 senators and 104 representatives, the letter calls for CFPB Director Richard Cordray to reconsider the agency’s recently proposed rule on arbitration, and examine and develop alternative proposals that foster consumer choice and preserve access to efficient dispute resolution.
“Rather than giving consumers greater access to justice, the proposal will make it more difficult and more expensive for consumers to resolve disputes for service providers,” reads the letter, led by Sen. Ben Sasse (R-Neb.) and Rep. Patrick McHenry (R-N.C.).
“We appreciate the support of these 140 members of Congress, who recognize that rules, such as this, that are not narrowly tailored to address specific abuses, can actually harm consumers,” said Eli Joseph, CUNA deputy chief advocacy officer. “CUNA remains concerned that frivolous class action litigation harms credit unions and their members, and jeopardizes consumers’ ability to access the high-quality and affordable products that credit unions provide.
“We agree with Congress that the CFPB should further study arbitration and should only propose solutions that can improve the process, as opposed to a sweeping ban that eliminates an option that the CFPB’s own research shows can be better than litigation.”
CUNA sent a letter to the CFPB last week regarding the proposed changes to the arbitration process.
The arbitration letter follows a July letter from Sasse and Sen. Joe Donnelly (D-Ind.), which had the signatures of 70 senators, that called for CFPB to tailor rulemakings to protect credit unions from regulatory burden. A similar message with 329 signatures was delivered by Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio), leading to a supermajority of Congress supporting the bureau’s use of its exemption authority.