By a vote of 231-190, the United States House of Representatives voted to approve a joint resolution (see previous coverage) to block the arbitration rule adopted recently by the Consumer Financial Protection Bureau ("CFPB"). The CFPB rule restricts mandatory arbitration clauses in certain consumer financial contracts.
Pursuant to the Congressional Review Act, a new rule can be repealed by simple majority votes in both the House and the Senate within 60 legislative days of the rule's finalization. The Senate has yet to announce a vote on the resolution. In the debate before the House vote, House Financial Services Committee Chair Jeb Hensarling (R-TX) commented on the potential negative effects of the arbitration rule:
"The CFPB's rule is bad for consumers, it's bad for community banks, it's bad for credit unions, it's bad for our economy. Washington should be focused on creating more jobs, not more class action lawsuits. It's time to fight the bureaucratic swamp, it's time to pass this resolution offered by Mr. Rothfus, and it's time to truly protect consumers instead of enriching trial lawyers."
House and Senate Republicans introduced resolutions to nullify the final arbitration rule adopted by the Consumer Financial Protection Bureau.
The Consumer Financial Protection Bureau issued a new rule that restricts mandatory arbitration clauses in certain consumer financial contracts.
The Consumer Financial Protection Bureau requested comments on proposed rules that prohibit mandatory arbitration clauses that deny aggrieved consumers the ability to participate in a class action.
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