State bankers associations from all 50 states and Puerto Rico today wrote to Senate leadership urging lawmakers to use their Congressional Review Act authority to stop the Consumer Financial Protection Bureau’s final arbitration rule from taking effect. Under the CRA, Congress has the ability to reject new federal regulations within 60 legislative days of publication in the Federal Register.
The controversial final rule prohibits customers from waiving their ability to participate in class action suits and limits drastically the use of mandatory arbitration agreements for financial products and services. The groups pointed out that the rule “would create a windfall for unscrupulous class-action attorneys, provide little or no relief to harmed consumers, and effectively eliminate an accessible alternative to the often-daunting judicial system.”
Members of Congress earlier this week signaled willingness to move forward to overturn the rule. Senate Banking Committee Chairman Mike Crapo (R-Idaho) indicated he would lead the effort, and Senate Majority Leader Mitch McConnell (R-Ky.) also signaled support for moving the process forward.