The regulatory battle between the CFPB and the Office of the Comptroller of the Currency over the consumer agency's final arbitration rule raged on Monday, with the OCC asking that the rule not be published until it conducted an independent review of the data behind it.
“As the prudential regulator for the federal banking system, the OCC should be granted the opportunity to conduct an independent review of the CFPB data to determine the safety and soundness implications of the Final Rule,” Acting Comptroller of the Currency Keith Noreika wrote in a letter to CFPB Director Richard Cordray.
In the letter, Noreika said the CFPB, unlike the OCC, does not review policies for safety and soundness. And he cited an agreement between the OCC and the CFPB in which the agencies agreed to coordinate their policies.
The CFPB issued final rules last week restricting the use of arbitration agreements in financial contracts. The rules have not yet been scheduled for publication in the Federal Register.
Under the rule, companies still can include arbitration clauses in their contracts, but they may not use those clauses to stop consumers from being part of a class action lawsuit. The rule specifies the language that must be used in the contract.
The rule also requires companies to submit to the CFPB detailed information about claims and awards made in arbitration. That data eventually will be made public, with consumer names and identifying data removed.
After the rule was issued, Noreika expressed concern over the issues, saying that they could affect the safety and soundness of the banking system. As a result, the Financial Stability and Oversight Council could vote to rescind the rules.
Noreika and Cordray are members of the council.
But Cordray said Friday that that OCC could not take the rules to the council, since the agency did not object to the proposal earlier in the process.
However, for much of that process, Thomas Curry, an Obama Administration appointee, was comptroller and would have been less like to object to them.
Noreika is a banking attorney who, as acting comptroller, did not have to go through the confirmation process or meet ethics requirements.
In his latest letter to Cordray, Noreika said that on July 5, his chief economist asked him to request the rule's background data. However, the final rule was published before he could make that requires.
A CFPB spokesperson said the agency has received the letter and is reviewing it.
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