Removing Barriers Blog

CUNA Staff Meets with CFPB Concerning Arbitration
Posted November 05, 2015 by CUNA Advocacy

Earlier this week Senior Director of Advocacy and Counsel Leah Dempsey met with CFPB staff in conjunction with several other financial services trade associations. During the meeting the group discussed the CFPB’s proposals under consideration for arbitration clauses.

Director Cordray discussed this issue at the last Consumer Advisory Board meeting. Additionally, the CFPB held a field hearing on the proposals in October, and a CUNA member participated as a panelist.

Some of the relevant parts of the proposal the CFPB has put forward include:

  • Clauses would be required to state that they do not apply to cases filed as class actions unless and until class certification is denied or the class claims are dismissed.
  • Proposals that would facilitate ongoing Bureau as well as public monitoring of consumer financial arbitrations and publishing these claims and awards on the CFPB website.

Since credit unions are member-owned cooperatives, they are more likely to resolve disputes with members without arbitration or litigation. However, for the small number of credit unions that do use arbitration clauses, there can be member benefits to this dispute resolution process. So we are concerned that limiting the use of arbitration agreements could be detrimental to credit unions and consumers. Additionally, we are concerned that limiting arbitration could cause an increase in class-actions, which have proven to be burdensome to credit unions, and provide little benefit or relief to credit union members.

We will continue to engage with the CFPB about their concerns with the arbitration proposals under consideration.