CUNA, NAFCU, and other financial services organizations wrote to the Consumer Financial Protection Bureau (CFPB) Tuesday urging it to deny the recent petition seeking of a regulation banning pre-dispute arbitration provisions in contracts for consumer financial services.
“The rule petitioners propose would harm businesses without any benefit to consumers. And, if promulgated, it would violate at least four Congressional mandates: the Congressional Review Act, the Dodd-Frank Act, the Federal Arbitration Act, and the Administrative Procedure Act,” the organizations note, adding that petitioners offer no valid basis for depriving consumers of the arbitration processes’ fair, speedy, and efficient dispute resolution.
Specifically, the petitioner’s proposal would violate:
The organizations also note the CFPB’s funding structure is currently being challenged at the U.S. Supreme Court as the Fifth Circuit Court of Appeals recently held it was unconstitutional. The U.S. Supreme Court heard oral arguments in October, with a decision expected by the end of June 2024.
Should the Supreme Court agree with the Fifth Circuit, this constitutional infirmity in the Bureau’s structure will provide yet another reason why the Bureau lacks the lawful authority to promulgate Petitioners’ proposed rule,” the letter reads.