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Politics & MoneyMortgage

Senate to soon vote to rescind new CFPB arbitration rule

Sen. Brown won't back down without a fight

With the Republican push for healthcare reform seemingly over for this year, it appears the Senate will likely vote on revoking the Consumer Financial Protection Bureau’s controversial arbitration rule soon.

According to an article in Reuters by Lisa Lambert and Pete Schroeder, “Once Republican lawmakers either pass or abandon their latest effort to redo healthcare, which could happen as early as Tuesday evening, they will take up a resolution to kill a Consumer Financial Protection Bureau rule finalized in July, according to multiple lobbyists.”

That article was written Tuesday morning, and by Tuesday afternoon, Republicans had given up on healthcare reform in 2017. That puts the CFPB arbitration rule in the Senate crosshairs.

Ever since the rule was announced in July, it’s been an uphill battle for rule to come into fruition due to strong opposition from Republicans.

The new rule mainly pertains to consumer financial products like credit cards and bank accounts that have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing.

The CFPB explained that this new rule is meant to deter wrongdoing by restoring consumers’ right to join together to pursue justice and relief through group lawsuits.

Republicans far from agree though. House Financial Services Chairman Jeb Hensarling, R-Texas, criticized the bureau, saying, “What the Bureau and the wealthy trial lawyers want is to take away arbitration for consumers and instead force them into class action lawsuits – which, just so happens, to require consumers to hire the very trial lawyers who will benefit most from this rule.”

As it stands, under the Congressional Review Act, Congress may overturn a broad range of regulatory rules issued by federal agencies by enacting a joint resolution of disapproval within 60 days of the rules being announced.

The House of Representatives already passed a “resolution of disapproval” to revoke the CFPB’s arbitration rule, and a similar effort was then launched in the Senate as well. A total of 23 Senate Republicans filed a resolution at the end of July to rescind the CFPB rule.

But it won’t be an easy process to pass the resolution through Senate. Sen. Sherrod Brown, D-Ohio, ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, already promised “to put up one hell of a fight” to keep the rule. And looking at this latest tweet storm, he still hasn’t given up.

The Reuters article noted that while Republicans are optimistic they can carry the resolution over the simple-majority threshold required by the Congressional Review Act, it will be a close vote since they cannot lose two more votes in order to get it to pass. 

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