The Credit Union National Association (CUNA) is lending support to legislation disapproving an arbitration rule that refused to consider different size and member-ownership structure of credit unions.
CUNA officials recently wrote to the Senate and Senate Banking Committee urging passage of H.J. Res. 111.
The legislation, officials noted, would disapprove of the Consumer Financial Protection Bureau’s (CFPB’s) – adding credit union consumer-members can be particularly harmed by class action litigation where resources are taken directly from members’ own pockets to pay for trial lawyers.
“Community financial institutions are consumer- and community-focused institutions that thrive or fail based on their reputation for fair treatment of their members/customers,” CUNA, Independent Community Bankers of America, and National Association of Federally-Insured Credit Unions officials wrote. “Reputation is a critical business asset to be protected and enhanced. The best marketing plan for these institutions is satisfied consumers. When complaints arise, these institutions are committed to resolving them in a fair, expeditious and timely manner.”
The authors said for many community financial institutions, arbitration is a practical alternative to costly and interminable class action litigation.
“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,” the letter continued. “Class action litigation can be ruinous for a community financial institution and the consumers that rely on them for financial services.”