CUNA President/CEO Jim Nussle responded to a recent op-ed from Consumer Financial Protection Bureau (CFPB) Director Richard Cordray in a LinkedIn post Friday. Cordray wrote in the New York Times defending the CFPB’s arbitration rule, leading Nussle to respond that the bureau’s failure to exempt credit unions from the rule shows a fundamental misunderstanding of the nature of credit unions.
“Because of their unique cooperative structure, credit union members have more options for seeking a resolution to any incongruities, almost all of which are quicker and more cost effective than class action litigation,” Nussle wrote. “Director Cordray says consumers come first at the CFPB, but this rule works against the best interest of credit union member-owners. The CFPB simply does not understand that making it harder for credit unions to serve consumers is not consumer protection.”
Specifically, the CFPB’s rule would restrict the use of arbitration clauses. CUNA believes that the bureau should utilize the authority granted it by section 1022 of the Dodd-Frank Act and exempt credit unions.
Since credit unions were not exempted, CUNA has backed Congressional efforts to repeal the rule. CUNA backed a resolution to repeal the rule that has passed the House, and has urged the Senate to pass its resolution.