The CFPB on Monday released final rules that will restrict the use of arbitration clauses in financial contracts—specifically rejecting the argument made by credit unions that they should be exempt from the regulations.
"While credit unions may be nonprofit, member-owned entities that may have fewer incentives to engage in problematic practices with their members, it is not true that credit unions have never violated the law and have never faced cases in response to their past violations of the law," the CFPB said in its explanation of the rule.
Arbitration agreements make it virtually impossible for consumers to join together to file suit and seek damages from financial institutions, CFPB Director Richard Cordray said, in a conference call with journalists.
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