A Trump-appointed bank regulator pressed the Consumer Financial Protection Bureau on Monday to halt a rule that would prevent financial companies from banning class-action lawsuits in contracts for credit cards and other financial products.
Keith Noreika, the acting comptroller of the currency, requested that the bureau hold off on the rule until his agency had a chance to review it to make sure that it would not compromise the safety and soundness of banks. The CFPB hasn't provided the data necessary for him to do so, he said.
The rule, finalized last week, would ban the practice of mandatory arbitration, in which banks require in contracts with customers that disputes be handled through an arbitration process rather than through class-action lawsuits.
Congressional Republicans are eager to stop the rule from going into effect one way or another. Many have sought the ouster of the bureau's director, Richard Cordray, who was appointed by former President Barack Obama. Now the rule faces an unusual challenge from within the executive branch.
While the bureau regulates banks and financial firms for consumer protection, the Office of the Comptroller of the Currency regulates banks for safety and soundness and should be given time to review the rule, Noreika noted Monday.
His agency would do so quickly, he added. "A few additional weeks to address the prudential concerns that I have raised seem a sound investment," he said.