Why Does Credit Union National Association Defend Forced Arbitration that 97% of Credit Unions Don’t Use?
Several of Group’s Board Members Represent the Few Credit Unions (Only 3-8%) That Use Forced Arbitration While the Group’s President Has Been in the Pocket of the Big Banks and the Financial Industry for 20 Years
When it comes to the Consumer Financial Protection Bureau (CFPB)’s rule on forced arbitration, trade groups like Credit Union National Association (CUNA) have been among the loudest voices of opposition. A curious position considering the fact that 97% of credit unions don’t use forced arbitration in their credit card contracts and only 8% of banks and credit unions have such clauses in their checking account agreements. Why does the Credit Union National Association oppose efforts to end forced arbitration when most credit unions don’t use it? Perhaps the answer can be found by looking at the group’s board and president.
Several CUNA Board Members Are Associated with Credit Unions That Use Forced Arbitration Unlike 92-97% of Credit Unions Overall
- CUNA Board Member John Sackett is Treasurer of Royal Credit Union’s Board of Directors. Royal Credit Union has a Funds Transfer and PopMoney Agreement that contains a forced arbitration clause. [John Sackett, Credit Union National Association, accessed 10/24/17; Funds Transfer & Popmoney Agreement, Royal Credit Union, accessed 10/24/17.]
- CUNA Board Member Gary Furtado is the President and Chief Executive Officer of Navigant Credit Union. The Navigant Credit Union Business Online Banking Agreement includes a forced arbitration clause. [Gary Furtado, Credit Union National Association, accessed 10/24/17; Navigant Credit Union Business Online Banking Agreement, Navigant Credit Union, accessed 10/24/17.]
- CUNA Board Member Brett Martinez, is President and CEO of Redwood Credit Union, whose Visa credit card agreement includes a forced arbitration clause. [“Brett Martinez,” Credit Union National Association, accessed on 10/23/17; “Visa Credit Card Agreement and Truth in Lending Disclosure,” Redwood Credit Union, accessed on 10/23/17.]
- CUNA Board Member Tony C. Budet is President and Chief Executive Officer of University Federal Credit Union. University Federal Credit Union’s “Business Membership Agreement” contains a mandatory arbitration clause. Despite its own use of arbitration clauses, an information guide written and distributed by University Federal Credit Union urges members to avoid buying cars from dealerships that utilize binding mandatory arbitration because the clauses “severely limit your legal rights.” It also notes that consumers “may be forced to buy from a dealership with this very bad clause” due to a lack of options. [“Tony C. Budet,” Credit Union National Association, accessed on 10/23/17; “Business Membership Agreement,” University Federal Credit Union, accessed on 10/23/17; “Wheels 101® Buyer’s Guide,” University Federal Credit Union, accessed on 10/23/17.]
CUNA President & CEO Jim Nussle has opposed the CFPB’s arbitration rule and backed efforts to repeal the rule. As a Congressman he took nearly $1.5 million from financial interests and his second largest donor was the American Bankers Association.
- Nussle has written multiple columns stating his opposition to the rule. Nussle said, “Credit unions and their members overwhelmingly support congressional efforts to rescind the CFPB’s arbitration rule” and “the arbitration rule creates a greater likelihood that money will come out of [a credit union member’s] own pockets to pay for trial lawyers.” [Jim Nussle, “Arbitration rule latest example that CFPB doesn’t get the credit union difference,” LinkedIn, 08/25/17; Jim Nussle, “Credit Unions Squeezed by CFPB’s One-Size-Fits-All Arbitration Rule,” Morning Consult, 09/22/17; “CUNA backs use of CRA to repeal CFPB arbitration rule,” CUNA, 07/20/17; “CUNA pushes Senators to back arbitration repeal resolution,” CUNA, 08/16/17]
- Why would Nussle support repealing the CFPB’s rule on forced arbitration when most credit unions don’t use such clauses? During his congressional career, he a received $1,436,239 from the financial industry. Nussle’s second largest contributor during his congressional career was the American Bankers Association, receiving $78,800 from 1989 to 2006. [Open Secrets search for Jim Nussle, accessed 10/23/17; Open Secrets search for Jim Nussle, accessed 10/23/17.]