Removing Barriers Blog

Small Business Panel on Forced Arbitration to be Held Next Week
Posted October 19, 2015 by CUNA Advocacy

Earlier this month, the CFPB held a field hearing on forced arbitration in Boulder, Colorado. In addition to receiving public comments at this hearing, the agency also released proposals for consideration by a Small Business Review Panel, which will convene prior to a rulemaking on the subject. We now know that this SBREFA panel will be held next Wednesday, October 28. This small business outreach process is a requirement under the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).

The CFPB typically selects between 15 to 20 Small Entity Representatives (SERs) to serve on this panel, which are are also allowed to bring an advisor to the meeting. The SERs provide feedback to the CFPB about its proposals usually before, during, and after the meeting. In addition to the CFPB, the Small Business Administration's Office of Advocacy, and OMB Office of Information and Regulatory Affairs (OIRA) must be a part of the SBREFA process and consider feedback from SERS. Reports from these panels are usually released along with the associated Notices of Proposed Rulemakings (NPRMs).

Often the CFPB will convene pre-SBREFA panel conference calls to solicit feedback on regulatory proposals. The panel itself is usually a full-day event, and SERs can also send a follow-up letter within a two-week timeframe after the panel ends. 

Since credit unions are member-owned cooperatives, we 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 are many consumer/member benefits to this dispute resolution process. We are therefore reviewing these recent proposals, and plan to send a letter to the CFPB, SBA, and OIRA about how changes to the arbitration process may impact our member credit unions.

Any credit unions that have feedback on the CFPB proposals should contact Senior Director of Advocacy & Counsel, Leah Dempsey.