Republican lawmakers took their first official step July 20 toward negating a newly adopted Consumer Financial Protection Bureau rule that would prohibit financial firms from using mandatory arbitration to block class actions by consumers.
A resolution to stop the rule (H.J. Res. 111), introduced and sponsored by Rep. Keith Rothfus (R-Pa.), will head to the House floor next week, according to a spokesman for House Majority Leader Kevin McCarthy (R-Calif.).
Under the Congressional Review Act, majorities in both houses can negate a rule with presidential approval. House Financial Services Committee Chairman Jeb Hensarling (R-Texas) told reporters every Republican on that committee has signed on to the resolution.
On the Senate side, Banking Committee Chairman Mike Crapo (R-Idaho) announced the July 20 filing of that chamber’s version. Twenty-four Republican senators cosponsored the resolution, including every Republican member of the Senate Banking Committee except Sen. John Kennedy (La.). Kennedy declined to comment.
The House measure is likely to pass but the Senate version’s future is more uncertain, given that a similar effort to thwart a CFPB rule on prepaid cards was never brought up for a vote in the Senate.
Senate Republican leadership has a full plate with health care, tax reform, nominations, and government spending priorities, although lawmakers have already negated more than a dozen Obama administration rules using the CRA.
Democrats in the Senate are unlikely to back the measure, leaving Republicans, with a 52-seat majority, little margin for defection.
“The rule is important for consumers and there is no sound public policy rationale for repealing it,” Rep. Maxine Waters (Calif.), the leading Democrat on the House Financial Services Committee, told Bloomberg BNA through a spokeswoman. “It is outrageous that Republicans are trying to nullify the rule to the detriment of consumers.”
Nonprofit Public Citizen called the Republicans’ efforts “a savage attack on American consumers.”
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To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
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