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- State Street Challenging BNY Mellon As Largest Custody Bank
- Changes to FINRA Advisory Committees: Phase 1
- SEC Approves CAT Fee Dispute Resolution Process
- Boston-Area Consultant & Friend Settle SEC Insider Trading Charges
- SEC Chair Clayton: Statement on Status of the Consolidated Audit Trail ('CAT')
- Goldman to Launch $5bn Fund with China Investment Corp.
- Wells Fargo Launches Robo-Adviser Targeting Millenial Investors
- Barclays Fails to End U.S. 'Dark Pool' Class Action
- Goldman Sachs' Chief Risk Officer, Craig Broderick, to Retire
- Time to Renew FINRA Registrations - B/D, IA, Agent, IA Rep, Branches
- New Jersey’s Next Governor Could Be a Democrat Who Worked at Goldman Sachs
- FINRA New York Region Networking Seminar - December 1st
- SEC Approves “Pay-to-Play” and Related Rules for Capital Acquisition Brokers
- Hedge Fund Giant Paul Singer Targeted for Destruction by Steve Bannon
- Saudi Arabia's arrest of Prince Alwaleed 'would be like arresting Warren Buffett or Bill Gates' in the US
- Arrest of Billionaire Saudi Prince Touches Sizable Stakes - Citigroup, Twitter, Lyft
- New York Fed President William Dudley set to announce retirement
- FINRA Arbitration Panel Rules Against ex-LPL Broker in $30Mn Lawsuit vs. Firm
- OOPS! Goldman, JPMorgan, BofA Fail in Pricing an IPO
- Former Merrill Broker Pleads Guilty to Fee Fraud, Faces Up To 25 Years
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NEWSLETTERS & ALERTS
Rules & Regulations
CFPB’s Rule Banning Class Actions Survives First Challenge
Keith Noreika, the Acting U.S. Comptroller of the Currency, will not try and quash a new rule issued by the Consumer Financial Protection Board (CFPC) that bans the use of mandatory arbitration agreements by financial services institutions. The CFPB’s arbitration rule, which went into effect July 10, makes it easier for investors to band together in class action lawsuits against banks, by prohibiting those institutions from using clauses in financial services agreements that force consumers into arbitrations to resolve disputes.
Many had expected Mr. Noreika to ask the Financial Stability Oversight Council (FSOC) to temporarily halt the rule citing concerns that it could threaten the safety and soundness of the banking system. The FSOC, established under Dodd-Frank, has 10 voting members (representing federal regulators) and 5 non-voting members. The voting members are:
- the Secretary of the Treasury (Chairs the Council);
- the Chairman of the Board of Governors of the Federal Reserve System;
- the Comptroller of the Currency (OCC);
- the Director of the Bureau of Consumer Financial Protection (CFPB);
- the Chairman of the Securities and Exchange Commission (SEC);
- the Chairperson of the Federal Deposit Insurance Corporation (FDIC);
- the Chairperson of the Commodity Futures Trading Commission (CFTC);
- the Director of the Federal Housing Finance Agency (FHFA);
- the Chairman of the National Credit Union Administration (NCUA); and
- an independent member with insurance expertise who is appointed by the President and confirmed by the Senate for a 6-year term.
However, the deadline for petitioning the FSOC passed on Saturday without Mr. Noreika having taken any action. On Monday, Mr. Noreika explained his decision not to challenge the rule: “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.”
In the meantime, Mr. Noreika said, his agency’s economists would continue reviewing the impact of the arbitration rule.