The House passed a CUNA-backed resolution of disapproval (H.J. Res. 111) Tuesday for the Consumer Financial Protection Bureau’s (CFPB) arbitration rule that would restrict the use of arbitration agreements. CUNA has a number of concerns with the rule, and sent a letter of support to both chambers in advance of the House vote.
“CUNA, the leagues and credit unions fully support Congress and their efforts to repeal the CFPB’s arbitration rule and we will continue to actively engage with the Senate on this important issue,” said Jim Nussle, CUNA president/CEO. “Credit unions frequently work with members to provide refunds, work out payment plans, and find other solutions to resolve a dispute. In its final rule the CFPB declined to recognize the unique size and structure of credit unions in the rule or the harm that class action litigation can cause to credit unions and their members.”
The CFPB’s rule, finalized earlier this month, bans financial service providers from using pre-dispute resolution agreements to block class action lawsuits. It also requires companies to submit to the CFPB certain records about claims, counterclaims and awards issued in arbitration.
CUNA’s most substantial concern with the rule is that it encourages members, against their best interest, to engage in litigation against the institution of which they are a member-owner. CUNA also believes the final rule hurts the ability of credit unions to limit class action lawsuits.