Republicans Introduce Congressional Resolutions to Nullify CFPB Arbitration Rule
Republicans in the House and Senate introduced resolutions to nullify the final "arbitration rule" that was adopted recently by the Consumer Financial Protection Bureau ("CFPB"). The resolutions were issued pursuant to the authority granted by the Congressional Review Act (the "Act"). Under the Act, if the relevant committee in either of the chambers of Congress submits a joint resolution disapproving of an agency rule, then the rule can be overturned by a simple majority vote in Congress within 60 legislative days of finalization.
The House resolution was sponsored by Rep. Keith Rothfus (R-PA), who accused the CFPB of failing to protect consumer interests:
"The CFPB's anti-arbitration rule hurts consumers and it's another example of the problems caused by this rogue and unaccountable agency. We know that consumers get better results through arbitration than through class action lawsuits. Despite the fact that the agency acknowledged this fact in one of its own reports, the bureaucrats at the CFPB have decided they know better."
Similarly, Senate Banking Committee Chair Mike Crapo (R-ID) took aim at the CFPB itself attacking its lack of accountability. He also criticized the 2015 CFPB study that was used to justify the rule's adoption:
"The rule is based on a flawed study that leading scholars have criticized as biased and inadequate, noting that it could leave consumers worse off by removing access to an important dispute resolution tool. By ignoring requests from Congress to reexamine the rule and develop alternatives between the status quo and effectively eliminating arbitration, the CFPB has once again proven a lack of accountability. Given the problems with the study and the Bureau's failure to address significant concerns, it is not only appropriate but incumbent on Congress to vote to overturn this rule."
Available only to Premium subscribers.