Credit union trade groups urged senators Monday to support efforts to nullify a CFPB rule restricting the use of mandatory arbitration, even as a key Democrat said the recent Equifax data breach and Wells Fargo debacle demonstrate the need for the rule.
"For many community financial institutions, arbitration is a practical alternative to costly and interminable class action litigation," leaders of CUNA, NAFCU and the Independent Community Bankers of America said, in a joint letter to Senate leaders. "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".
However, Senate Banking Committee ranking Democrat Sherrod Brown of Ohio said the rule is needed to help protect consumers.
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