WASHINGTON—With both the House and Senate in recess this week, a key focus of NAFCU and CUNA will be the CFPB’s field hearing in New Mexico Thursday.
The CFPB plans to discuss the arbitration process (arbitration clauses) employed by financial institutions to resolve differences between account holders and the FI in an efficient manner without engaging in litigation.
Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer, said it is expected that the Bureau will propose rulemaking around arbitration.
“If rulemaking is indeed proposed, we will be analyzing that proposal carefully to determine any effect it may have on credit union business operations,” said Eurgubian. “We may have a credit union representative at the hearing to talk about the credit union difference and the CU model compared to that of larger banks.”
CUNA stated that the CFPB’s SBREFA proposals indicate an interest in limiting—and arguably effectively eliminating—the use pre-dispute arbitration clauses. CUNA said it has concerns that this could lead to more frivolous class-action litigation.
“When credit unions face frivolous class-action lawsuits, their members suffer when costs rise and resources are depleted,” CUNA told CUToday.info. “Arbitration can allow consumers to resolve a dispute they have with a financial institution, without the burden and cost of engaging in litigation.”
NAFCU noted that with Congress in recess it is encouraging its member credit unions to reach out locally to their elected officials. The trade association said it will also be monitoring the vehicle sales report on Wednesday and the jobs report on Friday.