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July 18, 2017

Senate resolution in works to overturn CFPB's arbitration rule

[UPDATED] A resolution from Senate Republicans that would overturn the CFPB's final arbitration rule, published in today's Federal Register, may be revealed as soon as today, according to Bloomberg.

The CFPB issued its final arbitration rulemaking last week. The rule prohibits the use of arbitration agreements for the purpose of limiting access to class action litigation.

This regulation is effective Sept. 18 with mandatory compliance for pre-dispute arbitration agreements entered into on or after March 19, 2018.

Using the Congressional Review Act, legislators can overrule new federal regulations with a joint resolution of disapproval within 60 legislative days.

Earlier this week, Acting Comptroller of the Currency Keith Noreika asked the CFPB to delay publication of the rule, noting concerns about its impact on the safety and soundness of banks.

Senate Banking Committee Chairman Mike Crapo, R-Idaho, said last week that hewants to lead the effort to draft a resolution to overturn the CFPB's final arbitration rule.

NAFCU President and CEO Dan Berger said that as the rule stands, it looks like "a massive giveaway to trial lawyers." The association strongly supports consumer protections, but it has also urged that credit unions not be made subject to rules addressing abuses in which they do not engage.