CFPB

CFPB Rule On Arbitration Possibly To Be Overturned

The U.S. Senate is expecting to overturn a new ban on banks and credit card companies requiring customers to surrender their right to sue in order to open accounts.

According to a Reuters news report, now that their most recent attempt to repeal Obamacare has failed, Republican lawmakers are ready to pass a resolution to undo a Consumer Financial Protection Bureau (CFPB) rule finalized in July.

The resolution, which passed the House of Representatives last month, says financial companies must allow customers to participate in class-action lawsuits, and cannot be forced to only settle disputes in closed-door arbitration.

According to lobbyists, Republicans are optimistic they can pass the resolution, even though the party has a slim margin in the Senate and cannot lose two more votes after Republican Senator Lindsey Graham announced he will vote against it. Republican Senators Susan Collins and Lisa Murkowski, who frequently break party ranks, and freshman Senator John Kennedy, are under pressure to vote to repeal the rule. Democrats, of course, are solidly opposed.

If the GOP is able to get the votes it needs, a signature from President Donald Trump will nullify the rule and bar the CFPB from ever enacting a similar regulation. The clauses are commonplace for Trump’s family businesses: Trump hotels, golf clubs and winery all require customers to sign away rights to join class actions.

And recently, many were outraged when Equifax initially included arbitration clauses in free credit monitoring it offered to victims of its massive data breach. Democrats hope that anger will fuel opposition to the resolution.

The CFPB began drafting the rule under former President Barack Obama. Rule supporters say it restores victims’ constitutional rights.

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