WASHINGTON—The CFPB has published its action in the Federal Register to remove from the federal code the Bureau's final rule that would have banned mandatory arbitration clauses in financial.
The notice comes after President Donald Trump signed a congressional joint resolution disapproving of the rule earlier this month.
As CUToday.info reported, prior to Trump’s action, the House and Senate voted in favor of killing the CFPB’s ban on arbitration clauses in financial contracts, which would have allowed class action suits against financial institutions instead of requiring that disputes go to private arbitration.
Both NAFCU and CUNA supported the House and Senate votes.
Financial institutions, most especially banks, had been fighting the rule in Congress, arguing it would lead to a wave of class action lawsuits and that the related costs would be passed onto consumers. Consumer groups were outspoken in favor of the CFPB plan.
Credit unions, which largely do not include language in their contracts requiring arbitration, had nonetheless been calling for the rule to be repealed.
The rule was to take effect in March of 2018.