OCC Head Does Not Challenge CFPB Arbitration Rule
Fri 11 Aug, 2017 / by C. Dirk Peterson / Client Alerts
08/11/07 – Acting Comptroller of the Currency Keith Noreika has decided not to formally challenge the Consumer Financial Protection Bureau’s (CFPB) arbitration rule.
The Dodd-Frank Act allows members of the Financial Stability Oversight Council (FSOC) to petition the Treasury Secretary to delay implementation of a CFPB rule if the FSOC member believes that the rule would pose a threat to the broader financial system.
The FSOC is a committee of federal financial regulators who are charged with monitoring the financial system for broad systemic risks. If 7 out of 10 members of the FSOC decide that a CFPB rule may pose a threat to the financial system, they can vote to overturn the rule.
FSOC members only have 10 days to file the petition to delay implementation of a rule once the rule is published in the Federal Register.
On July 31, 2017, Noreika issued a statement indicating that he “will not petition the FSOC to stay the effective date of the [arbitration] rule.” Noreika maintained that he still had concerns about the rule and its potential to adversely affect banks and their customers, but he decline to petition FSOC because his agency, the Office of the Comptroller of the Currency (OCC), was unable to complete its review of the data supporting the CFPB’s rule within the 10 day timeframe.
However, Noreika warns that the rule “may turn out to be the proverbial straw on the camel’s back,” in terms of its effect on banks. He hopes that Congress will use the Congressional Review Act to annul the rule.