WASHINGTON–CUNA said it is backing efforts by some in Congress on a resolution of disapproval for the prohibition the Consumer Financial Protection Bureau has announced against forced arbitration agreements, which would prohibit financial firms from using mandatory arbitration to block class actions by consumers.
Even though only a small number of credit unions use the arbitration process, it is an important tool for credit unions and their members to resolve disputes, CUNA said in a statement.
H.J. Res 111 and a Senate version that is also being released call for using the Congressional Review Act to repeal the rule.
“The CFPB’s arbitration rule is flawed and once again, the Bureau refused to recognize the unique size and structure, and inherent consumer protections provided by America's credit unions,” said CUNA CEO Jim Nussle in a statement. “The rule removes an often quicker and less expense alternative dispute resolution process for credit unions and instead encourages costly litigation, which depletes the resources of credit union member-owners. Credit unions and their members are more than capable of resolving disputes without the predatory interference of the plaintiffs’ bar. CUNA, the leagues and credit unions support Congressional efforts to have the CFPB create a better rule that enhances consumer protection and encourages the good work of consumer-friendly financial service providers such as credit unions, rather than another unnecessary regulation for credit unions.”