Mon, Oct 30, 2017
A big victory for credit unions last week as the Senate voted to block implementation of the CFPB’s arbitration rule. The measure passed the House in July and President Trump is expected to sign the repeal legislation.
The CFPB rule would have prohibited financial institutions, including credit unions, from using arbitration agreements to keep consumers from being part of a class action suit.
Credit unions, leagues and CUNA supported the repeal effort. The Maine and Alaska leagues worked closely with CUNA to ensure their Senators, who cast crucial votes, were educated on the issue.
“We’re grateful that the Senate, and the House, recognized that the CFPB's arbitration rule did not benefit credit unions members,” said CUNA President/CEO Jim Nussle. This rule was just the latest example of the one-size-fits-all rulemaking coming from the CFPB and thankfully Congress acted to remedy the situation.”
The repeal legislation also prevents the CFPB from writing a “substantially similar” rule down the road without congressional action.
The Senate vote came on the heels of a Treasury Department report that criticized the CFPB’s arbitration rule as flawed and a giveaway to class-action attorneys.
The CFPB’s own study found customers receive higher awards through arbitration than lawsuits on average, but noted fewer arbitration cases lead to awards.