DENVER (10/8/15)--The Consumer Financial Protection Bureau (CFPB) announced Wednesday it is considering proposing rules to ban arbitration clauses, and hosted a field hearing here to discuss it. John Ruby, senior vice president and chief lending officer at Bellco CU, Greenwood Village, Colo., presented the credit union perspective at the hearing.
“As a member-driven, member-owned financial cooperative, we are accountable to our members, and therefore it is critical we provide an overall experience that causes our members to choose us for their financial services products. That experience includes price, value, convenience and how we conduct business,” he said. “Part of our conduct includes contracts for various deposit and loan products, some of our contracts include arbitration clauses, while others do not. In either case, the existence or nonexistence of arbitration clauses has been a non-issue in Bellco’s history.”
The CFPB says its potential proposals are meant to prevent consumer financial institutions from using “free pass” arbitration clauses to block consumers from suing in groups to obtain relief. The proposals would not ban arbitration clauses entirely, but any clauses would have to state explicitly that it does not apply to class action cases.
CUNA Chief Advocacy Office Ryan Donovan echoed Rudy’s thoughts about credit unions’ relationships with their members.
“Credit unions are the only consumer-owned cooperatives in the financial marketplace, and have a proud heritage of protecting their members’ interests. Credit unions are more likely to resolve disputes without resorting to arbitration or litigation. CUNA is reviewing the CFPB proposals on arbitration to determine whether there are any potential adverse implications for credit unions.
Donovan also thanked Rudy for participating in the panel, saying he “represented the voices of credit unions throughout the country.”