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.