President Trump Wednesday signed a resolution nullifying the CFPB’s rule governing the use of mandatory arbitration agreements—a move that was immediately praised by credit union trade groups.
“We appreciate President Trump and Congress for their leadership and listening to our concerns and working to ensure consumers and institutions have access to various forms of dispute resolution,” NAFCU President/CEO B. Dan Berger said following the president’s action.
Trump signed the resolution in a ceremony that included representatives of several financial services associations that included Berger and NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt.
CUNA President/CEO Jim Nussle also praised Trump’s move.
“The repeal of the CFPB’s arbitration rule is a win for credit unions, as well as a positive sign that Congress is willing to intervene when it comes to ill-tailored rules not narrowly focused on abusers of consumers,” Nussle said.
The Senate last month passed a resolution nullifying the CFPB rule, which would have prohibited financial institutions from including mandatory arbitration agreements in financial services contracts. The House earlier had passed the same resolution.
Congress used the Congressional Review Act, a law that allows Congress to void recently enacted rules issued by a government agency.
The law also prohibits the CFPB from enacting the same or a similar rule again.
In signing the resolution, Trump ignored a personal appeal by CFPB Director Richard Cordray, who wrote the president to make the case that the rule was pro-consumer.
Cordray said that by signing the resolution, Trump made it more difficult for consumers to pursue “corporate giants like Wells Fargo and Equifax.”
“In signing this resolution, the president signed away consumers’ right to their day in court,” he said. “This action tips the scales of justice in favor of Wall Street banks less than ten years after they caused the financial crisis.”
