Learn more about Member Benefits
Earlier today, John Rudy, senior vice president and chief
lending officer at affiliated Bellco Credit Union, participated in the Consumer
Financial Protection Bureau’s (CFPB) field hearing on arbitration. Immediately
prior to its hearing, the CFPB published an outline
of the proposals under consideration in preparation for convening a Small
Business Review Panel as part of the Small Business Regulatory Enforcement
Fairness Act of 1996 (SBREFA) to gather feedback from small industry
stakeholders. This included a list of questions
for SBREFA panelists and a fact
sheet summarizing SBREFA. We are currently reviewing this proposal to
determine whether there are any adverse implications for credit unions.
The Dodd-Frank Act required the CFPB to study the use of
arbitration clauses in consumer financial markets and gave the Bureau the power
to issue rules. The agency released a long awaited study
on arbitration last March. At 728 pages long, it was extremely critical of
the use of pre-dispute arbitration agreements—not surprisingly, it incurred considerable
push back from some participants in the financial services industry. Today’s
proposal includes substantial changes to arbitration agreements for a number
different of consumer financial products and services, and CFPB staff indicated
that the Bureau is considering a prohibition on class-action bans in the
markets it oversees.
The hearing was held at History Colorado Center, in Denver,
CO, where CFPB Director Richard Cordray provided opening
remarks. Participating panelists, including Mr. Rudy, also provided opening
remarks and answered questions. In his remarks, Mr. Rudy talked about Bellco
Credit Union’s desire to keep credit union members satisfied, and about their
success in resolving disputes outside of litigation. He also highlighted the
credit union member-focused approach.
The question and answer portion of the hearing was
moderated by David Silberman, the Bureau’s Associate Director for Research,
Markets, and Regulations. He asked panelists several questions including, “what
alternatives are currently available to consumers who cannot band together to
seek relief before the court?” In his response on behalf of credit unions, Mr.
Rudy noted that arbitration should be the last line of defense. He also
discussed other ways to avoid disputes such as mediation and filing complaints
with the many institutions that already regulate credit unions.
We will update members as we continue to review today’s
proposals. Also, make sure to visit the COMP
Blog for more information on arbitration. A video of today’s hearing should be
available on the CFPB's site in the next few days.
Champion for the Credit Union Movement
Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
© 2018 Credit Union National Association
ADA Compliance Notice & Legal
© 2017 Credit Union National Association |
ADA Compliance Notice & Legal