Senate Republicans clear bill nullifying a pending consumer right to sue banks

Senate Majority Mitch McConnell and President Trump
(Image credit: Drew Angerer/Getty Images)

On Tuesday night, the Senate voted, 51-50, to overturn a banking rule that would have allowed consumers to band together in class action lawsuits against banks and other financial institutions. Sens. Lindsey Graham (R-S.C.) and John Kennedy (R-La.) joined every Democrat in opposing the bill, and Vice President Mike Pence broke the tie. The rule, finalized in July by the Consumer Financial Protection Bureau (CFPB) after five years of work, would have banned most forms of mandatory arbitration included in the fine print of almost all bank account and credit card agreements.

The banking industry had been lobbying hard for Congress to overturn the rule, using the Congressional Review Act, a previously obscure law that Republicans have used repeatedly this year to nullify regulations enacted under former President Barack Obama. The House passed its own bill overturning the arbitration rule in July, and President Trump is expected to sign it into law. "Tonight's vote is a giant setback for every consumer in this country," CFPB director Richard Cordray said in a statement. "As a result, companies like Wells Fargo and Equifax remain free to break the law without fear of legal blowback from their customers."

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Peter Weber, The Week US

Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.