Friday, September 2, 2016

CU Officials Have Change of Heart Regarding Arbitration Clauses

The American Banker is reporting that credit unions have lined up in opposition to the Consumer Financial Protection Bureau (CFPB) proposal to rein in arbitration clause, despite credit unions historical reluctance to use them.

The article cites that the credit union industry has shifted its stance on arbitration clauses as more credit unions are hit with class action lawsuits.

According to an industry survey, 15 percent of credit unions employ arbitration agreements.

However, a credit union industry spokesperson stated that credit unions have never supported the use of mandatory arbitration clauses.

Credit union officials are worried that the CFPB proposal may go too far and restrict credit unions' ability to use arbitration clauses.

Read the article (subscription required).

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