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A Resolution Repealing the Arbitration Rule Passed the House
Wednesday, July 26, 2017 7:00 AM

The House passed a resolution of disapproval (H.J. Res. 111) Tuesday for the Consumer Financial Protection Bureau’s (CFPB) arbitration rule that would restrict the use of arbitration agreements. Both Cornerstone and CUNA had a number of concerns with the rule, and sent a letter of support to both chambers in advance of the House vote.

Suzanne Yashewski, SVP Regulatory Compliance Counsel for the League, said, “Cornerstone opposes the proposal as drafted. Due to the unique structure of credit unions, it is important to preserve options for dispute resolution, including the option of limiting class action litigation. Should CFPB finalize this rule, the final version should exempt credit unions.”

The CFPB’s rule, finalized earlier this month, bans financial service providers from using pre-dispute resolution agreements to block class action lawsuits. It also requires companies to submit to the CFPB certain records about claims, counterclaims and awards issued in arbitration.

The biggest concern the League had with this rule if it passed, was that it encourages members, against their best interest, to engage in litigation against the institution of which they are a member-owner. And as previously noted, the final rule could also hurt the ability of credit unions to limit class action lawsuits.

For more information on the resolution, please click here