Arbitration ban could prevent access to financial services
Limiting access to arbitration could deprive consumers of an efficient means to resolve legal disputes, CUNA wrote to House leadership Wednesday. The House is considering CUNA-opposed legislation to effectively ban arbitration provisions in private contracts.
Arbitration can be an efficient means to resolve legal disputes between parties and the choice to include arbitration agreements in contracts is highly dependent on the credit union’s policies, priorities, and resources. As arbitration is merely one dispute resolution tool amongst many, CUNA would be concerned with any legislation attempting to arbitrarily restrict access to the arbitration system. Although arbitration may not be an appropriate forum in every dispute, it certainly can be the appropriate forum to resolve some disputes.
CUNA notes credit unions can adopt them to minimize litigation risk to avoid substantial financial effects on its membership.
“It is important, when considering laws that would ultimately limit options to resolve disputes, for Congress to recognize the substantial harm that expensive, protracted litigation levy on credit unions and their members,” the letter reads. “Consumers’ ability to access the high-quality, safe, and affordable products of credit unions would be put in jeopardy if credit unions are forced to reallocate considerable resources to defend against high-cost litigation due to the absence of a fair and efficient arbitration system.”