Removing Barriers Blog

Arbitration CRA Update: CUNA Supports Senate Efforts to Disapprove CFPB Rule

Yesterday afternoon, CUNA joined the Independent Community Bankers (ICBA) and the National Association of Federally-insured Credit Unions (NAFCU) in sending a letter to Senate and Committee leadership in support of H.J. Res 111.   

The letter reads, “Community financial institutions are consumer- and community-focused institutions that thrive or fail based on their reputation for fair treatment of their members/customers. Reputation is a critical business asset to be protected and enhanced. The best marketing plan for these institutions is satisfied consumers. When complaints arise, these institutions are committed to resolving them in a fair, expeditious, and timely manner. 

“For many community financial institutions, arbitration is a practical alternative to costly and interminable class action litigation. Class action suits serve the interests of trial lawyers at the expense of consumers who receive paltry settlements and community financial institutions who face exorbitant legal fees. Class action litigation can be ruinous for a community financial institution and the consumers that rely on them for financial services.”  

The legislation would disapprove the Consumer Financial Protection Bureau’s (CFPB’s) recent arbitration rule, which refused to take into account the very different size and member-ownership structure of credit unions, which can be particularly harmed by class action litigation where resources are taken directly from members own pockets to pay for trial lawyers. 

CUNA has been very engaged with the House and Senate in their pursuit to stop this harmful rule. In July, CUNA sent letters to Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan outlining the position of America’s credit unions and their 110 million members.  The House acted on this important resolution prior to recessing for August.  Last week, Senate Banking Chairman Mike Crapo said that he expects the Senate to act on the resolution soon, but no official schedule has been released. 

America’s credit unions will continue to work with the Senate and are hopeful it is brought to the Senate floor in the near future.