Acting Comptroller of the Currency Keith Noreika said Monday his agency wouldn’t formally seek the repeal of the Consumer Financial Protection Bureau’s forced arbitration rule, citing a lack of time to analyze its impact.
Noreika, temporary head of the Office of the Comptroller of the Currency, said the OCC won’t challenge the arbitration rule before the Financial Stability Oversight Council (FSOC), an interagency financial regulatory group established by Dodd-Frank. The acting comptroller said the OCC wouldn’t have enough time to complete “a thorough analysis” of the CFPB before the deadline to challenge it before FSOC.
The Dodd-Frank Act, which established FSOC and the CFPB, only lets FSOC review CFPB rules within 10 days of their publication in the Federal Register. Since the CFPB rule was published on July 19, Noreika said that window was too small for OCC to challenge the rule.
“Since the CFPB published the rule in the Federal Register prior to providing its data for our analysis and we have requested additional data in order to conduct a thorough review, the OCC cannot complete our thorough review in the limited time,” Noreika said in a statement.
The new CFPB rule forces companies to write arbitration clauses in ways that wouldn’t prevent consumers from joining class-action lawsuits. It also forces financial firms to hand over information about “initial claims and counterclaims, answers to these claims and counterclaims, and awards issued in arbitration.”
The CFPB will also collect “correspondence companies receive from arbitration administrators regarding a company’s non-payment of arbitration fees and its failure to follow the arbitrator’s fairness standards,” it said Monday. The agency said the review will allow the CFPB to judge whether the process is fair, and that redacted information received would be published in July 2019.
Republicans quickly denounced the arbitration rule, and the House voted last week along party lines to repeal it. It’s unclear if the Senate’s Republican majority will pass the repeal measure, or if any Democrats will support it.
Noreika said that he supports lawmakers’ efforts to repeal the arbitration rule, saying he hopes “Congress will act on this opportunity to preserve effective alternatives for consumers to resolve their disputes without lengthy and costly litigation.”