The Consumer Financial Protection Bureau’s (CFPB) arbitration rule is the latest harmful example of one-size-fits-all regulations and must go, CUNA President/CEO Jim Nussle wrote Friday in Morning Consult. Nussle wrote in support of the Senate acting to repeal the rule through the Congressional Review Act.
“Credit unions and banks are different, yet the arbitration rule treats credit unions the same as a self-admitted bad actor like Wells Fargo. The big banks have been abusing the system for years, treating their customers like cattle in the stockyards,” Nussle wrote. “And while we applaud the federal government’s belated attempts to reign them in, this is yet another occasion where a surgical scalpel is needed, but a broad sword is being used.
The CFPB’s rule would restrict the use of arbitration clauses. CUNA has consistently said the rule is inappropriate for credit unions, due to their unique structure.
“Rather than addressing any actual problems, the CFPB's arbitration rule has created an environment for credit union members to act against their own best interest. The rule encourages trial lawyers to engage consumers in costly and resource depleting litigation,” Nussle wrote. “For a credit union member, that means the arbitration rule creates a greater likelihood money will come out of their own pockets to pay for trial lawyers.”