WASHINGTON (6/27/12)--Noting that most credit unions do not use pre-dispute arbitration agreements in their consumer contracts, the Credit Union National Association (CUNA) urged the Consumer Financial Protection Bureau (CFPB) to focus on unregulated product and service providers as it examines the use of pre-dispute arbitration agreements in consumer contracts.
Other than credit card agreements, the CFPB should not focus on any particular markets for consumer financial products and services when it reviews the prevalence of pre-dispute arbitration agreements, CUNA Assistant General Counsel Luke Martone added in a comment letter to the CFPB.
CUNA also suggested the CFPB examine the impact and purpose of the pre-dispute arbitration agreements, instead of directing its review to the prevalence of particular terms in the agreements.
Arbitration agreements are often added to account and financial product contracts between financial institutions and their members or consumers.
The Dodd-Frank Wall Street Reform Act requested that the CFPB study the use of arbitration agreements in consumer financial services contracts. As a first step, the agency requested suggestions on the scope, methods and data sources it should use in its study. The results of the study will be reported to the U.S. Congress.
CUNA in the letter said it supports the CFPB's attempts to evaluate how the use of pre-dispute arbitration agreements impacts consumers, and agreed that the CFPB should analyze the types and frequency of claims that consumers bring in arbitration. However, CUNA added, the agency should also consider and minimize any potential burdens that may be imposed on credit unions as a result of the study.