Newsroom
NAFCU, others warn Senate of 'ruinous' litigation without arbitration
NAFCU, with other community financial institution trade associations, urged senators on Monday to "quickly approve" of H.J. Res. 111, which would nullify the CFPB's recent arbitration rule. The House passed the resolution last month.
"Community financial institutions are consumer- and community-focused institutions that thrive or fail based on their reputation for fair treatment of their members/customers," the letter stated. "Class action suits serve the interests of trial lawyers at the expense of consumers who receive paltry settlements and community financial institutions who face exorbitant legal fees. Class action litigation can be ruinous for a community financial institution and the consumers that rely on them for financial services."
The CFPB's arbitration rule, which prohibits the use of arbitration agreements for the purpose of limiting access to class action litigation, is currently set to take effect Sept. 18. Under the Congressional Review Act, legislators can vote to overrule new federal regulations with a joint resolution of disapproval within 60 legislative days after regulators have submitted the rule to Congress. The House approved of H.R. Res. 111 with a vote of 231-190.
NAFCU has noted its strong support for consumer protections but holds that the arbitration rule, as written, would stand to benefit trial lawyers at the expense of consumers and credit unions.
Monday's joint letter, sent by NAFCU, CUNA and the Independent Community Bankers of America, points out that even the CFPB's own report on the subject found that arbitration offers a better process and outcome for consumers. According to the CFPB report, those consumers involved in class actions received a little more than $32 from lawsuits that took nearly two years to complete, on average. However, in arbitration proceedings, the report found consumers were awarded about $5,400 on average with a five-month time span.
"For community financial institutions, loss of arbitration as a viable option would fuel continued industry consolidation, larger institutions, fewer communities without a dedicated institution and, ultimately, reduced consumer choice," the letter concludes.
Share This
Related Resources
Resiliency In Your Incident Response Plan
Cybersecurity
preferred partner
DefenseStorm
Blog Post
The Bottom Line on Insurance Tracking and Collateral Protection
Strategy
preferred partner
Allied Solutions
Blog Post
Add to Calendar 2024-04-15 09:00:00 2024-04-15 09:00:00 Mergers and Acquisitions: Unifying Two Different Executive Total Compensation and Benefits Programs Listen On: Key Takeaways: [03:50] With the merger of a smaller credit union into a larger one you are really only dealing with integrating staff into the larger credit union. [05:53] When working with a merger of equals we start with a deep dive into the executive compensation and benefits of each organization. [09:09] If your current executive benefits provider doesn’t conduct regular plan evaluations, consider having a plan audit anyway. [13:46] Don’t overpay for these things if you don’t have to. When you have more options available that means the cost is more appropriate. [17:11] It is in a unified organization’s best interest to do tier timelines where we look at your top executives who are critical to the unified organization’s success today and then slowly add in the next levels. Web NAFCU digital@nafcu.org America/New_York public
Mergers and Acquisitions: Unifying Two Different Executive Total Compensation and Benefits Programs
preferred partner
Gallagher
Podcast
Add to Calendar 2024-04-11 14:00:00 2024-04-11 14:00:00 Regulation E: Impacts Across Your Institution Dive into regulatory excellence with, Regulation E: Impacts Across Your Institution. This webinar is tailored to empower you with the knowledge and strategies necessary to effectively implement the Electronic Funds Transfer Act (EFTA) and Regulation E within your operations. You’ll explore how to apply Regulation E across various business areas to ensure compliance obligations are met with precision. Key Takeaways Learn the basics of EFTA and Regulation E Understand how to apply Regulation E at your organization to detect processes and transactions that require Regulation E compliance Discover how Regulation E may apply to a large breath of areas in your institutions and functions for which you may rely on third-party vendors Review recent enforcement activity for non-compliance with EFTA and Regulation E Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 11, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCCOs NCRMs Compliance and risk titles Education Credits NCCOs will receive 1.0 CEUs for participating in this webinar NCRMs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
Regulation E: Impacts Across Your Institution
Credits: NCCO, NCRM
Webinar
Get daily updates.
Subscribe to NAFCU today.