WASHINGTON—The CFPB’s arbitration rule may be tested soon as a resolution to overturn the rule under the Congressional Review Act is expected to come to a House vote as early as today.
Both CUNA and NAFCU said they are closely following the proceedings.
Released in final form earlier this month, the CFPB's arbitration rule prohibits the use of arbitration agreements for the purpose of limiting access to class-action litigation. It is set to take effect Sept. 18; compliance is mandatory for pre-dispute arbitration agreements entered into on or after March 19, 2018.
CUNA on Monday reiterated its support for the legislation to overturn the CFPB rule.
“We have asked the CFPB to consider the unique size and structure of credit unions in the rule,” said Leah Dempsey, CUNA senior director of advocacy and counsel. “While credit unions don’t often have arbitration clauses and enforce them there are certainly some credit unions that do. And, we have found that even in the CFPB’s own research there are consumer-friendly aspects to arbitration, so we think class-action litigation is not in the best interests of credit unions and their resources, which are then directed to pay for attorneys and taken out of the pockets of their members.”
As CUToday.info reported, the House resolution to repeal this rule was introduced last week by Rep. Keith Rothfus (R-PA) and House Financial Services Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-MO). All committee Republicans are signed on. More than 20 Republican senators, nearly all of them sitting on the Senate Banking Committee, also filed a resolution to repeal the rule.