WASHINGTON—The Senate Judiciary Committee was told that legislation that would restrict arbitration could harm credit unions and their members.
The position was outlined in a letter to the committee from America’s Credit Unions ahead of the committee’s hearing this week on arbitration.
In the letter, America’s Credit Unions President/CEO Jim Nussle stated that arbitration can be an efficient means to resolve legal disputes, and the “ability to quickly and amicably resolve disputes is essential to any modern financial institution.”
‘Would Limit Options’
“It is important, when considering laws that would ultimately limit options to resolve disputes, for Congress to recognize the substantial harm that expensive, protracted litigation levy on credit unions and their members,” Nussle wrote. “Consumers’ ability to access the high-quality, safe, and affordable products of credit unions would be put in jeopardy if credit unions are forced to reallocate considerable resources to defend against high-cost litigation due to the absence of a fair and efficient arbitration system.”
Nussle added that a recent analysis of CFPB data shows no connection between the use of arbitration and increased violations of law; nor any correlation between the use of arbitration and increased consumer complaints or heightened CFPB enforcement activity.
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