Acting Comptroller of the OCC Will Not File Petition to Stay CFPB Arbitration Rule
8/2/2017 6:19:00 PM
Despite his continuing concerns with the final arbitration rule, OCC Acting Comptroller Keith Noreika will not petition to delay the rule with the FSOC stating that the OCC is unable to complete a thorough review of the rule before the petition deadline. A resolution to repeal the rule is unlikely to come up for a vote in the U.S. Senate prior to the August recess.
Keith Noreika, the acting comptroller from the Office of the Comptroller of the Currency (OCC), has announced that he will not pursue a petition with the Financial Stability Oversight Council (FSOC) to stay the effective date of the Consumer Financial Protection Bureau’s arbitration rule. According to Noreika, because the CFPB published the final rule before providing the OCC with the underlying data for its analysis, the OCC will not be able to conduct a thorough review in time to meet the filing deadline.
While a resolution, H.J. Res. 111, sponsored by U.S. Rep. Keith Rothfus, R-Pa., which uses the Congressional Review Act (CRA) as a measure to repeal the CFPB’s arbitration rule passed in the U.S. House of Representatives by a 231-190 vote on July 25, it is unlikely to come up for a vote in the U.S. Senate prior to the August recess.
Senate Majority Leader Mitch McConnell, R-Ky., provided the Senate’s agenda before the August recess during a speech Aug. 1 and did not mention the resolution, according to an article in Morning Consult. Supporters of the resolution also may not have enough votes for it to pass in the Senate and some Republican senators are undecided or opposed, according to the article. If the Senate does not vote on the resolution before the recess, legislators have until Sept. 17 to approve it. The U.S. Senate and House of Representatives will return for the legislative session on Sept. 5.
The CFPB introduced the rule in final form July 10 and its opponents wasted no time in using their authority under the CRA to repeal the rule, a point that Noreika explicitly mentioned in his statement as a factor in not pursuing a stay through the FSOC.
“Given that Congress is considering use of the Congressional Review Act to overturn the CFPB’s final rule, I will not petition the FSOC to stay the effective date of the rule. I hope Congress will act on this opportunity to preserve effective alternatives for consumers to resolve their disputes without lengthy and costly litigation and to reduce the ‘piling on’ of legal and regulatory burden that I discussed in my testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, on June 22, 2017,” Noreika wrote.
As it stands now, the CFPB’s final rule to ban class-action waivers in arbitration agreements in contracts for consumer financial products will take effect Sept. 18, 2017, according to a notice in the Federal Register.
Compliance with the rule will apply to pre-dispute arbitration agreements entered into on or after March 19, 2018.
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