All Banking Law, All in One Place. Bloomberg Law: Banking is the comprehensive research solution that powers your practice with access to integrated banking-related legal news, analysis,...
The House passed a resolution July 25 that would invalidate a recently adopted Consumer Financial Protection Bureau rule to prohibit financial firms from steering consumers into mandatory arbitration to resolve disputes.
H.J.Res. 111, sponsored by Rep. Keith Rothfus (R-Pa.), passed the chamber in a 231-190 vote. A similar resolution has been introduced in the Senate, where it can be passed under the Congressional Review Act with a mere simple majority if voted on within 60 days of the rule’s official publication—July 19.
All Democrats opposed the resolution, joined by lone Republican, Rep. Walter Jones (N.C.).
The rule would prevent language in consumer agreements that bars class actions. The resolution’s supporters say the arbitration rule would subject consumers to expensive legal fees.
“Americans were promised a Consumer Financial Protection Bureau, but instead they obviously got a trial lawyer enrichment bureau,” House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said on the House floor.
The rule’s supporters contend that forced arbitration clauses are unfair because consumers rarely seek the remedy, allowing banks and payday lenders to charge them illegal fees.
The Trump administration said the president would sign the resolution scotching the rule if it passes both houses. If that happens, the CFPB would be prohibited by the Congressional Review Act from adopting a rule that is “substantially the same.”
The resolution’s chances in the Senate are uncertain, however, given a slim GOP majority and Democratic opposition.
A similar effort to nix a CFPB rule on prepaid cards never received a Senate vote, and Republican leaders there have a full agenda including health care, tax reform, nominations, and government spending.
Financial trade groups, including the Consumer Bankers Association and Independent Community Bankers of America, criticized the CFPB’s rule and urged lawmakers to overturn it.
The U.S. Chamber of Commerce and Americans for Prosperity, the conservative advocacy group backed by the Koch brothers, both issued a “key vote alert” in favor of the resolution.
Democratic lawmakers have backed the CFPB’s rule. At a July 25 press conference, Rep. Maxine Waters (D-Calif.) called the resolution “another shameful Republican effort to take away consumer protections.”
“This is outrageous and unacceptable,” she said.
To contact the reporter on this story: Rob Tricchinelli in Washington at email@example.com
To contact the editor responsible for this story: Phyllis Diamond at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)